Fannie Mae: Consumer housing sentiment slips in August

Americans grew slightly less confident about the housing market in August, as more consumers expressed concerns about job stability, selling conditions and future home prices, according to Fannie Mae’s monthly National Housing Survey.

The agency’s Home Purchase Sentiment Index (HPSI) fell 0.4 points to a reading of 71.4 — with four of its six components declining.

More positive outlooks for mortgage rates and homebuying conditions were not enough to offset declines in seller sentiment, home-price expectations, household income growth and job security.

Despite the overall dip, more consumers said August was a better time to buy a home.

Twenty-eight percent called it a good time to purchase — up five percentage points from July — while those saying it was a bad time fell to 72%. That shift pushed the net buyer sentiment up nine points.

Seller optimism moved in the opposite direction. Fifty-eight percent of respondents said it was a good time to sell while 41% said it was a bad time.

Price expectations also weakened with just 40% of consumers predicting that home prices will climb in the year ahead.

Mortgage rate sentiment was a rare bright spot. More respondents now expect rates to fall in the next 12 months than to rise — the first time that has happened since January.

Meanwhile, confidence in job security and household income softened. The share of employed respondents unconcerned about losing work dropped by five points to 45%, and only 17% reported that their income was higher than a year ago. Most (70%) said their earnings had stayed the same.

Rent-price expectations moderated, with consumers projecting a 4.9% average increase over the next year, down from July’s pace. Home prices, by contrast, are expected to rise 1.4% on average, up from July estimates.

Other highlights from Fannie Mae’s August survey:

• 68% said they would buy, rather than rent, if they moved — a two-point increase.
• 55% described getting a mortgage as difficult, up slightly from July.
• One-third expect their personal finances to improve, while 22% foresee them worsening — both unchanged.
• Views on the broader economy edged higher, with 35% saying the U.S. is on the right track, up three points.