Building on the previous month’s rebound, the Fannie Mae Home Purchase Sentiment Index (HPSI) grew another 9.0 points in June, reaching a reading of 76.5.
While the HPSI — which is derived from consumer answers to six component survey questions — is down 15.0 points compared to the same time last year, the reading represents a significant rebound from just two months prior, when the survey hit a record low.
“A second month of improvement in June allowed the HPSI to regain some of the sharp losses in optimism observed in March and April,” said Doug Duncan, Senior Vice President and Chief Economist. “The share of renters who say it’s a good time to buy a home is now at its highest level in five years, suggesting favorable conditions for first-time homebuying, consistent with the recent rebound in home purchase activity.”
First-timers aren’t the only ones confident in the state of the housing market. The percentage of all respondents who say it’s a good time to buy a home has grown from 52% in May to 61% in June, while the share of those who believe it’s a bad time to buy fell from 39% to 27%. As a result, the net share of Americans who believe it’s a good time to buy rose by 21 percentage points.
Sellers appear to be coming around, as well. The percentage of respondents who say it’s a good time to sell a home increased from 32% to 41%, while those who say it’s a bad time to do so dropped from 62% to 48% — resulting in a net increase in positive sentiment of 23 percentage points.
“Homeowners seem to have taken note of the resulting lack of housing supply, with an increased share saying it’s a good time to sell a home,” Duncan said.
Duncan did note that activity may cool again in the coming months, depending on how much consumers choose to delay or accelerate their homebuying plans because of the ongoing pandemic.
Notably, despite apparent optimism regarding the housing market, survey participants continue to express apprehensions about their own financial situations. The net share of respondents who say they aren’t concerned about losing their job in the next 12 months decreased three percentage points.
“Survey respondents’ persistent, substantially elevated concerns about job security in the face of record unemployment remains a key takeaway, particularly among renters and homeowners with a mortgage,” Duncan said. “We believe the continuing uncertainty regarding the coronavirus’ containment suggests an uneven and potentially volatile course toward economic recovery.”