Fannie Mae Home Purchase Sentiment Index
The Fannie Mae Home Purchase Sentiment Index® (HPSI) is a key indicator of consumer sentiment in the housing market. Derived from Fannie Mae’s National Housing Survey®, the HPSI condenses consumer opinions on housing market conditions, making it a vital tool for anyone interested in real estate trends.
Fannie Mae Home Purchase Sentiment Index® (HPSI)
The Fannie Mae Home Purchase Sentiment Index® (HPSI) is a key indicator of consumer sentiment in the housing market. Derived from Fannie Mae’s National Housing Survey®, the HPSI condenses consumer opinions on housing market conditions, making it a vital tool for anyone interested in real estate trends.
The index reflects six key components of housing sentiment, including:
- Good/Bad Time to Buy
- Good/Bad Time to Sell
- Home Price Expectations
- Mortgage Rate Outlook
- Job Concerns
- Household Income Changes
Why the HPSI Matters for Buyers and Sellers
Understanding the Home Purchase Sentiment Index® allows buyers, sellers, and real estate professionals to gauge consumer confidence. High scores often indicate stronger buying sentiment, while lower scores may reflect concerns over affordability, mortgage rates, or broader economic conditions. For real estate investors, understanding these metrics is crucial in timing market entry and making informed investment decisions. You can access the detailed Fannie Mae Home Purchase Sentiment Index® (HPSI) Report embedded on this page or by downloading the full PDF. Stay ahead of the market by using real-time data to inform your real estate decisions.
Fannie Mae Home Purchase Sentiment: Buyer and Seller Confidence Trends in 2024
December 09 2024 : The Fannie Mae Home Purchase Sentiment Index® (HPSI) for November 2024 shows significant shifts in consumer sentiment toward the housing market. As of November, the HPSI stands at 75.0, marking a steady increase compared to last year. This uptick reflects growing optimism among consumers as they adjust to higher mortgage rates and home prices. In recent years, the HPSI has seen notable highs and lows. The index peaked at 88.0 in 2018 but dropped significantly during the pandemic, reaching 78.5 in 2020. The downward trend continued into 2023, when it hit a low of 64.5. However, in 2024, the HPSI has shown signs of recovery, climbing to 72.1 on average for the year.
One key factor influencing this sentiment is consumers' perception of whether it is a good time to buy a home. In November 2024, only 23% of respondents said it is a good time to buy, a slight improvement from the previous year’s 14%. The decline in positive buying sentiment since 2021, when it peaked at 57%, highlights the challenges caused by high mortgage rates and home prices. Meanwhile, 77% of consumers still believe it is a bad time to buy, reflecting ongoing affordability concerns.
On the selling side, the outlook remains more positive. In November 2024, 64% of respondents said it is a good time to sell, consistent with trends from the past few years. This figure remains high compared to 2011, when only 11% of people believed it was a good time to sell. In contrast, only 35% think it is a bad time to sell, showing that sellers remain confident due to high home values and limited inventory.
The data also reveals changing expectations regarding mortgage rates. In 2024, optimism about falling mortgage rates has increased. In November, 45% of respondents believed mortgage rates would go down, a significant increase compared to the early part of the year. Conversely, only 25% expect rates to rise. This growing confidence in lower mortgage rates is driving improved overall sentiment in the market.
Home price expectations also play a critical role. In November 2024, 38% of consumers believe home prices will rise over the next year, while 25% expect prices to decline. This is a shift from 2022, when a majority believed prices would continue increasing. As expectations for price growth moderate, more potential buyers may be encouraged to enter the market, easing the current affordability burden.
The Fannie Mae data shows that while buyers still face challenges, their sentiment is improving slowly. High home prices and mortgage rates remain key obstacles, but increased optimism about falling rates is a positive sign. Sellers, meanwhile, continue to benefit from favorable conditions, with most believing it is still a good time to sell. The overall improvement in the HPSI suggests that as consumers adjust to the new market reality, confidence in the housing market is gradually returning
