Housing sentiment decreases for fifth month
WASHINGTON – Jan. 10, 2017 – Fannie Mae's latest Home Purchase Sentiment Index (HPSI) came in at 80.7 in December, marking a 0.5 percentage point decrease from November and its fifth consecutive monthly decline.
"Despite the post-election bump in general consumer attitudes, a rapid rise in mortgage rate expectations has tamped down home purchase sentiment, at least in the near term," says Doug Duncan, senior vice president and chief economist at Fannie Mae.
"A spike in economic optimism in the immediate aftermath of an election is typical," he adds. "Whether consumers will sustain this level of optimism into 2017 remains unclear."
The study found a four-percentage point drop in consumers who expect mortgage rates to fall over the next 12 months, but a two-percentage point increase in consumers who think now is a good time to buy a house. The percentage of consumers who think now is a good time to sell and those who expect home prices to rise remained unchanged.
"The spike in interest rates reflects, in part, the market's anticipation of pro-growth policies from the incoming administration," Duncan says. "If this optimism comes to fruition, it should translate into stronger income growth and increased job security for consumers – the two HPSI components that could help support housing sentiment this year."
Source: HousingWire (01/09/16) Ramírez, Kelsey
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