Fannie Mae’s January Home Purchase Sentiment Index rose to 82.7 in January, an increase of 2 percent from December, after five months of declining numbers.
Compared to January 2016, the HPSI, which surveys around 1,000 Americans on housing, is up 1.2 percent. Additionally, more people feel it is a better time to sell, as that number rose from 13 percent in December to 15 percent in January.
However, the number of respondents who think now is a good time to buy dropped from 32 percent in December to 29 percent in January. Forty-two percent of Americans believe home prices will rise, an increase of 7 percent from the previous month.
“Three months after the presidential election, measures of consumer optimism regarding personal financial prospects and the economy are at or near the highest levels we’ve seen in the nearly seven-year history of the National Housing Survey,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “However, any significant acceleration in housing activity will depend on whether consumers’ favorable expectations are realized in the form of income gains sufficient to offset constrained housing affordability. If consumers’ anticipation of further increases in home prices and mortgage rates materialize over the next 12 months, then we may see housing affordability tighten even more.”
More than two-thirds of respondents (69 percent) said they are not worried about losing their job, an increase of 1 percent from the December’s HPSI. Fifteen percent said their household income is “significantly higher” than it was this time last year, a 5 percent increase from December.