Fannie Mae’s Home Purchase Sentiment Index Increases

Mortgage servicing company’s index gained 1.2 points in February

Fannie Mae’s Home Purchase Sentiment Index Increases
March 8, 2016

In February, Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased from 81.5 to 82.7; this is 1.2 points higher than in January 2016 and February 2015.

The increase was calculated following a survey of 1,000 households. They are surveyed over the phone and asked six questions about the housing market, employment, and other issues. Each component is calculated individually and then factored together to determine the HPSI. The survey results are shared monthly.

During this time period, more consumers had greater confidence in their employment and its stability and believed that the market is now favorable towards buyers, leading to an increase of 4 percent for both. This is a sharp change in respondents’ feelings towards the market, which was at an all-time low at the end of January. On the other hand, only 7 percent of respondents believe that the market is favorable for sellers, a drop of 2 percent from January. Those who believed their jobs were secure reached an all-time high of 87 percent. This adjusts the net share to 75 percent.

Fewer said they expected mortgage rates to increase over the next year, which continued a downward trend by dropping 4 percent to a net share score of 33 percent. On the other hand, when asked if mortgage rates would decrease, an additional 2 percent said yes, bringing the total net share of respondents to a negative 50 percent.

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