Consumers’ belief that they would not lose their job over the next 12 months leaped 16 percentage points in July from a year ago and 8 percentage points in just one month. Expectations that mortgage rates will go down over the same period rose 24 percentage points year-over-year.
“Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category. However, recent financial market events following when the survey data were collected could weigh on consumer views looking ahead,” said Doug Duncan, Fannie’s senior vice president and chief economist.
The job and rates components are two of six measured in Fannie’s Home Purchase Sentiment Index, which saw increases in all but one area; expectations that home prices will grow declined by 2 percentage points annually in July, which essentially translates to a better position for homebuyers.
The overall HPSI peaked at 93.7 in July. June’s HPSI was 91.5 while for July 2018, it was 86.5.
The good-time-to-buy component increased 7.2 and 2.2 percentage points to 26% on an annual and monthly basis, respectively. The share of consumers claiming it’s a good time to sell a house rose 3 percentage points from a year ago to 44%, and ticked up 1 from June to July.
Job-wise, 81% are confident they won’t lose their position over the next 12 months, and 21% report their income is significantly higher than the prior 12-month period.