NATNews Blog > September 2016 > HPSI points to continued, moderate strengthening of housing

    HPSI points to continued, moderate strengthening of housing

    9/9/2016 8:43:57 AM
    By Katie Penote
    The Fannie Mae Home Purchase Sentiment Index (HPSI) fell 1.5 points to 85.0 in August but continued its gradual climb upward from the same period last year.
    Four of the six HPSI components decreased during the month, most notably the share of consumers who expect home prices to go up in the next 12 months and the share who say now is a good time to sell a home – decreasing 6 and 5 percentage points in August, respectively. Additionally, more consumers reported a positive employment outlook from the previous month, up 4 percentage points in August, and those reporting significantly higher household income fell 1 percentage point.
    Overall, consumer housing sentiment remains positive and bodes well for continued growth in housing activity.
    “Consumers have a fairly optimistic 12-month outlook on housing at the end of the summer home-buying season, supported by increased job confidence and more favorable expectations regarding their personal financial situations compared with this time last year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The return to a slight upward trend in the HPSI during the spring and summer is, thus far, in line with our forecast, which calls for 4 percent growth in home sales in 2016 to the best level since 2006 and continued improvement for 2017.”
    First Anniversary Edition

    “The Home Purchase Sentiment Index (HPSI) was first released publicly in September 2015. On its first anniversary, we take a look back at the movements of the HPSI over the five years we have calculated it based on data from the National Housing Survey,” Fannie Mae noted in its release. “The HPSI trended strongly upward from March 2011 until mid-2013. Home sales also strengthened sizably in 2012 and 2013. As the HPSI dipped lower in response to the ‘Taper Tantrum’ in mid-2013, home sales fell in 2014 for the first time in four years. The HPSI fully recovered its pre-tantrum levels by the fall of 2014 and has since been on its gradual upward trend, reaching a record high in July 2016 before pulling back slightly in August. Its recent trend signals that home sales will likely advance through next year.”
    Home Purchase Sentiment Index Component Highlights

    Fannie Mae’s August 2016 Home Purchase Sentiment Index (HPSI) decreased 1.5 points in August to 85.0, after an all-time high in July. Overall, the HPSI is up 4.2 points since this time last year.
    • Increasing for the third consecutive month, the net share of Americans who say it is a good time to buy a house rose by 1 percentage point to 34 percent.
    • The net percentage of those who say it is a good time to sell fell 5 percentage points from an all-time high in July to 15 percent.
    • The net share of Americans who say that home prices will go up fell 6 percentage points from last month to 35 percent.
    • The net share of those who say mortgage rates will go down over the next year fell 2 percentage points to -38 percent, after increasing for the past three months.
    • The net share of Americans who say they are not concerned with losing their job rose 4 percentage points to 73 percent.
    • The net share of Americans who say their household income is significantly higher than it was 12 months ago fell 1 percentage point to 10 percent, stabilizing after June’s steep fall.
    Detailed HPSI and NHS Findings

    For detailed findings from the August 2016 Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Consumer Attitude Measures page on Also available on the site are in-depth topic analyses, which provide a detailed assessment of combined data results from three monthly studies of NHS results.