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Consumer confidence in the housing market took an upswing in the latest Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index (HPSI), which increased by 0.4 points to 75.0 during November.

The latest reading included a new record-high share of consumers indicated that they expect mortgage rates to decline over the next 12 months (45%), with fewer respondents expecting home prices to increase (12%). And although slightly less than one quarter of respondents (23%) believed it was a “good time to buy a home,” that was substantially higher than the 14% share recorded in November 2023.

“Over the past year, we have seen a significant improvement in general consumer sentiment toward the housing market, largely driven by increased optimism that mortgage rates will fall and improved perceptions of both homebuying and home-selling conditions,” said Mark Palim, Fannie Mae senior vice president and chief economist. “Notably, this improvement in sentiment continues a trend that began about two and a half years ago following the sizeable run-up in home prices during the pandemic, and it is likely due in part to consumers’ slow-but-steady acclimation to current market conditions. Of course, high home prices and high mortgage rates remain the primary reasons why the vast majority of consumers think it’s a ‘bad time to buy’ — trends that we expect to continue into the new year.”

Palim also noted that more consumers expected their personal financial situation to improve in 2025, adding that an anticipated slowing in home price growth “may help ease some of the affordability burden and incentivize some households, especially those who have been waiting in the wings, to finally act on their home purchase decision.”