According to the Fannie Mae Home Purchase Sentiment Index (HPSI), consumers are becoming less optimistic about buy homes. The HPSI reports results from the National Housing Survey, and then foretastes a monthly indicator. The point of the HPSI is to illustrate signals of the housing market and help people in the industry make informed decisions. The six components that make up the HPSI are whether consumers think it is a good or bad time to buy or sell a house, the direction they expect home prices and mortgage interest rates to move, how concerned they are with losing their job, and whether their incomes are higher than they were a year ago.
The HPSI has consistently decreased over the past three months, finishing with a drop of 1.1 points in October. This decrease is caused, in part, by a large drop or people reporting an increase in income from the past year. Another reason for the decline is the anticipated increase in interest and mortgage rates of homes. People are also expecting the value of their homes to decrease. The one bright spot in the HPSI is that more people believe that now is good time to buy a house.
It is important to note that the HPSI is a very volatile index from month to month. The increasing wage and employment reported for October could have a very strong impact on the HPSI. Of course, if these increases are sustained. With the recent results of the presidential election, the stability of everything is a little uncertain. The article attached below has a very interactive graph in which you can assess each aspect of the HPSI and see the trends.
http://fanniemae.com/portal/research-and-analysis/housing-survey.html
I checked out the graph on the website and found it to be very interesting to observe the different components influencing the HPSI. I noticed that the overall HPSI had been affected mostly by when consumers think its a good time to sell, over recent years.
ReplyDeleteI can understand how each component would have an affect on the HPSI. The interactive graph on the website is very interesting to be able see the details of each component as well. It makes sense that the HPSI is volatile from month to month considering the amount that it relies on expectations of consumers. As mentioned, it will be interesting to see how the uncertainty caused by the recent election will impact the HPSI.
ReplyDeleteI think this number is very important because it definitely is a big indicator for our economy is doing and how willing people are to spend their money. I also think the results of this last election played a big part in the recent numbers because people are unsure what to think about the future.
ReplyDeleteThe election played a huge role on this because many people everywhere are rioting and unsure about the future and that can be a result of the recent numbers.
ReplyDeleteI think this number is very important, the results showing how consumers feel can reveal a lot. If it shows negativity in consumer's wanting to buy houses it helps to explain why they feel this way. Also, with the election playing out like it did I'm sure they're are many whom are worried about what will happen now that Trump is in office and reform will surely start to take place.
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