Anticipation for the
The HPSI grew to 72.8 in February, up 2.1 points
Optimism around home-selling conditions is the main factor buoying confidence of respondents, the government-sponsored enterprise said.
The belief continues to hold among respondents that interest rates will come down over the next 12 months, though this assertion dropped by a percent from the month prior to 35%. Consumers are also starting to be more cheerful about their outlook pertaining to buying or selling a property.
"The HPSI increased for the third straight month, continuing its slow but steady rise from the low-level plateau observed through much of 2023; and consumer sentiment toward housing now rests firmly above where it was this time last year," said Doug Duncan, senior vice president and chief economist at Fannie Mae, in a press release.
More consumers are starting to coalesce around the notion that it's a good time to sell a house. The share of people who felt this way grew to 65%, up from 60% last month. The share of consumers who believe it's a good time to buy also lurched upwards, though slightly, from 17% to 19%, results from the survey show.
"Consumer attitudes toward home-selling conditions increased markedly in February, with current homeowners, in particular, expressing greater optimism that it's a 'good time to sell,' a development that may foreshadow an upcoming increase in existing home listings," Duncan said.
"Additionally, despite the recent uptick in rates, consumers remain relatively optimistic that mortgage rates will decrease over the next 12 months. If their expectations come true and rates move closer to the 6-percent mark by the end of 2024, as we currently expect, then it's likely that consumer sentiment on both sides of the transaction will improve, perhaps leading to a further thawing of the housing market."
In January, Fannie's economists predicted that
"A decline in mortgage rates – and the resulting uptick in sentiment – would obviously bode well for the upcoming spring homebuying season, although affordability will likely remain a significant challenge for buyers, at least until there's a meaningful addition to net supply," Fannie's economist added.
Looking ahead