Fannie Mae‘s Dwelling Buy Sentiment Index (HPSI) decreased 1.9 factors in December to 73.1 — a determine considerably greater than year-ago ranges because of ongoing mortgage fee optimism.
The index reported that buyers proceed to count on mortgage charges to say no over the following 12 months. In December 2024, the share of customers that anticipated mortgage fee shrinkage held regular at 42%, decrease than November’s 45%. Nevertheless, the measure is improved in comparison with December 2023’s 31%.
The shares expressing optimism towards homebuying and home-selling situations declined barely month over month, however each elements stay up yr over yr. Total, the HPSI is up 5.9 factors in comparison with this time final yr.
“Although the HPSI fell to finish the yr, client sentiment towards the housing market completed 2024 considerably above year-ago ranges, attributable partially to respondents’ ongoing expectations that mortgage charges will decline,” stated Mark Palim, vice chairman and chief economist at Fannie Mae.
“Nevertheless, simply over one in 5 customers believes it’s a ‘good time’ to purchase a house – though that share has risen during the last yr, too, after reaching an all-time low of 14% in This fall 2023. Whereas respondents stay discouraged by the pandemic-era run-up in residence costs and mortgage charges, the upward development in residence shopping for sentiment in 2024 might mirror a gradual acclimatization to the widely less-affordable market situations.”
Palim went on to say that Fannie Mae expects “a modest decline in mortgage charges, decelerating residence value progress, and better wage progress to enhance the relative affordability of buying a house within the new yr.”
The proportion of respondents who say it’s a good time to purchase a house barely declined from November 2024’s 23% to 22%. Those that say it’s a unhealthy time to purchase elevated from 77% to 78%, month-over-month. The online share of those that say it’s a good time to purchase shifted down by 3 share factors month over month to -57%.
The share of respondents who say it’s a good time to promote a house decreased from 64% to 63%, whereas the proportion who say it’s a foul time to promote elevated from 35% to 36%.
Respondents who consider residence costs will rise throughout the subsequent 12 months remained unchanged from November’s 38%. On the flip facet, those that consider residence costs will go down elevated from 25% to 27%. The share who assume residence costs will keep the identical decreased from 36% to 35%.