While historically low mortgage rates continued to fuel a hot housing market, uncertainty around coronavirus response and uncertainty ahead of the election kept consumer confidence in check in October, according to Fannie Mae.
The Home Purchase Sentiment Index rose again to 81.7 last month, up slightly
Selling sentiment had a net positive score of 24 percentage points in October, a 6-point improvement from September, but a 17-point drop year-over-year. Seller optimism stands at 59%. Consumer attitude for buying a home skewed positive by 25 percentage points. The share of "good time to buy" hit 60%, jumping 9 points month-to-month and 4 percentage points from October 2019.
About 49% of borrowers expect mortgage rates to stay the same in the next 12 months while 32% predict them to increase and 11% to decrease. The net share who forecast rising rates fell 6 percentage points from September and 4 percentage points from the year before.
"To date, the HPSI has recovered over 60% of its COVID-19 pandemic loss, reflecting the bright spot that the mortgage market has been in the economy," Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a press release.
Meanwhile, the two measures of sentiment related to employment weakened.
A growing faction of survey respondents forecast
"The continuing evolution of the pandemic and the 2020 election outcomes may have longer lasting and unexpected impacts on consumer sentiment, as we saw following the 2016 elections, and we expect both factors will shape the housing market over the coming months," Duncan said.