Home purchase sentiment fell for the third straight month in October, reflecting the uncertainty consumers face, according to Fannie Mae.
Fannie Mae reported Monday that its Home Purchase Sentiment Index dropped 1.1 points to 81.7 from the month prior. Four of the index's six components decreased, including the share of consumers expecting home prices to go up and the share of consumers reporting significantly higher income from last year.
"The HPSI fell in October for the third straight month from its record high in July, reaching the lowest level since March," said Doug Duncan, senior vice president and chief economist at Fannie Mae, in a news release. "Recent erosion in sentiment likely reflects, in part, enhanced uncertainty facing consumers today."
The share of consumers who reported significantly higher income over the past year dipped 8 percentage points to its lowest point in more than three years at 4%, the largest decrease of any component. But Duncan warned that observers should take this component with a grain of salt.
"This component of the HPSI is volatile from month to month, and the firming trend in wage gains from the October jobs report, if sustained, may foreshadow an improving view in the near future," he said.
Additionally, the net share of Americans who say that home prices will go up fell in October, falling 3 percentage points from last month to 31%.
Meanwhile, the net share of those who believe now is a good time to sell increased 4 percentage points to 19% in October, nearing the all-time survey high posted in July. Similarly, the net share of Americans who say it is a good time to buy a house rose by 2 percentage points to 31%.
