The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index (HPSI) ended 2024 in decline, with a 1.9-point drop in December to 73.1. However, the HPSI is up 5.9 points compared to this time last year.
The new HPSI survey found the percentage of respondents who say it is a good time to buy a home decreased from 23% to 22%, while the percentage who say it is a bad time to buy increased from 77% to 78%. The percentage of respondents who say it is a good time to sell a home decreased from 64% to 63%, while the percentage who say it’s a bad time to sell increased from 35% to 36%.
The percentage of respondents who say home prices will go up in the next 12 months remained unchanged since last month at 38%, while the percentage who say home prices will go down increased from 25% to 27%. And the percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 45% to 42%, while the percentage who expect mortgage rates to go up remained unchanged since last month at 25% and the share who think mortgage rates will stay the same increased from 29% to 32%.
“Even though the HPSI fell to end the year, consumer sentiment toward the housing market finished 2024 substantially above year-ago levels, attributable in part to respondents’ ongoing expectations that mortgage rates will decline,” said Mark Palim, Fannie Mae senior vice president and chief economist. “However, just over one-in-five consumers believes it is a ‘good time’ to buy a home – although that share has risen over the last year, too, after reaching an all-time low of 14% in Q4 2023. While respondents remain discouraged by the pandemic-era run-up in home prices and mortgage rates, the upward trend in homebuying sentiment in 2024 may reflect a slow acclimatization to the generally less-affordable market conditions.”
