U.S. housing sentiment continues downward trend
The Home Purchase Sentiment Index (HPSI) dropped 2 points to 85.7 in October, continuing its downward trend, said Fannie Mae.
"After hitting a survey high during the spring home buying season, the HPSI has trended downward, declining in October to its lowest level in a year," said Doug Duncan, senior vice president and chief economist at Fannie Mae.
Duncan also noted that the lower HPSI reading in October was "broad-based," since "all but one of the six HPSI components declined."
The net share of Americans who saw a good time to buy a home dropped 5 percentage points to 21 percent, "tying its second lowest reading in the survey's history," according to Duncan.
From the sellers' perspective, the respondents who saw a good time to sell fell 3 percentage points to 35 percent, said Fannie Mae.
The survey also showed that respondents who expect home prices to go up dropped 2 percentage points to 37 percent, while the respondents who expect mortgage rates to go down decreased 1 percentage point.
According to the survey, respondents' confidence in job security fell 1 percentage point to 78 percent, while respondents who saw a significantly higher household income than one year ago remained at 19 percent.
"The contrast between the survey's findings of weak home buying sentiment and overall economic optimism mirrors what we're seeing in the broader economy," said Duncan.
"While economic growth posted the fastest back-to-back pace in four years in the third quarter, residential investment declined for the third consecutive quarter, a first for the current expansion," Duncan added.
Fannie Mae is a government-sponsored enterprise, aiming at expanding the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities. The company was founded in 1938 during the Great Depression as part of the New Deal. ■