Fewer Consumers Expect Home Prices to Rise

Home purchase sentiment fell in August as home price expectations and other components decreased, according to Fannie Mae.

Fannie Mae reported Wednesday that its Home Purchase Sentiment Index fell 1.5 points to 85.0 in August from July's all-time high but still increased 4.2 points from the same period last year. Four of the index's six components also decreased.

Leading these decreases was the share of consumers who expect home price will rise in the next 12 months, which dropped 6 percentage points to 35%. Similarly, the share of Americans who say now is a good time to sell dipped 5 percentage points to 15%.

Additionally, the share of consumers who think mortgage rates will go down over the next year fell 2 percentage points to 38%, after posting increases for the past three months. The other component to decline was the share of consumers who say their household income is significantly higher than a year ago, which dropped a single percentage point to 10%.

Neither of the two components that posted increases showed marked upticks, however. The share of Americans who say it is a good time to buy rose by 1 percentage point to 34%, representing the third consecutive month of increases. And the share of Americans who are not concerned with losing their jobs rose 4 percentage points to 73%.