Fannie Mae Digitizes National Housing Survey Results

by devteam September 9th, 2015 | Share

FanniernMae’s Economic & Strategic Research Group have taken the company’s NationalrnHousing Survey (NHS), conducted since 2011, and attempted to distill andrnquantify some of the responses into a single monthly predictive indicator,rntheir Home Purchase Sentiment Index.  ThernHPSI, its creators say, is designed to providerndistinct signals about the direction of the housing market, helping industryrnparticipants to make better informed business decisions.</p

Fannie Mae notes that while there are other general indicesrnof consumer economic sentiment, this will be the first dedicated entirely tornhousing.  It uses the answers to sixrnspecific NHS questions that solicitrnconsumers’ evaluations of housing market conditions and address topics that arernrelated to their home purchase decisions.</p

The index is based onrnsix questions which cover consumer opinions on the following: </p<ul type="disc"

  • Is it a very goodrn time to buy a house, a somewhat good time, a somewhat bad time, orrn a very bad time to buy a house?  Torn sell a house?</li
  • Over the next 12 months, will home prices in general will go up, go down, or stay the samern as where they are now?  What aboutrn mortgage interest rates?</li
  • Are you very concerned, somewhat concerned, not veryrn concerned, or not at all concerned that you will lose your job in the nextrn twelve months?</li
  • How does your current monthly household income compare to what it was twelve months ago? </li</ul

    While Fannie Mae has constructed thernindex to reflect conditions back to the beginning of the NHS, this first publicrnrelease reflects the HPSI as of August 2015.  rnAt that point the index stood at 80.8, down 0.5 point from July, continuingrnthe decline from its all-time peak in June 2015. The HPSI is up 5.3 pointsrnsince this time last year. On net, two components of the HPSI improved inrnAugust, with Confidence about Not Losing Job increasing 3 points and Good Timernto Sell increasing 1 point. Home Price and Mortgage Rate net expectations bothrnfell 3 points since last month.</p

    </prn<ul type="disc"

  • The percent of respondents who said that it is a goodrn time to buy a house rose to 63 percent, 2 points above last month’srn all-time survey low.</li
  • Those who say it is a good time to sell rose 2 pointsrn to 47 percent. The percent of respondents who say it is a bad time to sellrn also increased to 44 percent.</li
  • The percent of respondents predicting a rise in homern prices over the next 12 months fell to 47 percent. The percent who saidrn that home prices will go down rose to 9 percent.</li
  • The share who expect mortgage interest rates to go uprn in the next 12 months rose 3 percentage points to 54 percent. Only 5rn percent say they will go down, unchanged from July. </li
  • The share of respondents who say they are not concernedrn with losing their job rose to 83 percent, while the share of respondentsrn who say they are concerned with losing their job fell to 16 percent.</li
  • The share of respondents who say their household incomern is significantly higher than it was 12 months ago fell to 24 percent,rn while those who say it is significantly lower fell to 12 percent.</li</ul

    Doug Duncan, senior vice president andrnchief economist at Fannie Mae said, “Consumer attitudes toward the current homernselling climate have slid back to their April 2015 level, contributing to arnslight decline in the August HPSI reading relative to its four-year high,rnreached two months ago.  Expectations ofrnrising mortgage rates and increasing concerns in the last six months about therndirection of the economy seem to be weighing on consumers’ assessment of thernhousing market. </p

    “Those who think it’s a good time tornbuy or sell a home have consistently pointed to favorable mortgage rates as thernprimary reason for their optimism,” Duncan said. “Those who think it’s a badrntime to buy or sell a home have consistently pointed to unfavorable economicrnconditions as the primary reason for their pessimism. Still, the four-yearrnupward trend in the HPSI indicates that consumers remain fairly optimisticrnabout the housing market.”

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  • About the Author


    Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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