With more consumers believing it’s a great time to buy a home, the Home Purchase Sentiment Index had its best November since the index's release in 2011, according to Fannie Mae.
After reaching an
Half of the six sentiment components increased month-over-month. The 11 percentage-point jump in net share of consumers believing it's a good time to buy represented the largest short-term change. This, at least in part, probably relates to the 7 percentage-point rise in consumers expecting home price growth in the next year. Lastly, those anticipating significant rises in household income went up 2 percentage points.
Year-over-year, the percentage of consumers expecting rates to fall remains dramatically higher. However, on a month-to-month basis, the share of consumers who expect rates to continue falling is dwindling.
"Over the past year, a growing share of consumers say that they expect mortgage rates to remain steady," Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a press release. "While
"That lean supply means the recent mortgage rate decline — holding payment size constant — allows borrowers to increase bid prices for homes. As a result, home prices are propelled higher, mitigating the benefit of lower borrowing costs for many borrowers. Additionally, a rising savings rate suggests that consumers could be growing more financially conservative.