Consumers lost some confidence in the housing market during August, according to a new index.
The Fannie Mae Home Purchase Sentiment Index, which officially launched Tuesday, fell from 81.3 in July to 80.8 last month. The HPSI reached an all-time high of 84.7 in June 2015.
Background on the index
The index includes six components that assess how consumers feel about the housing market and address topics related to their future homebuying decisions, according to Fannie Mae’s website. The data is extracted from Fannie Mae’s existing National Housing Survey.
Consumers are asked about the following:
- Whether it’s a good time to buy a house.
- Whether it’s a good time to sell a house.
- Whether home prices will move higher, lower or stay the same over the next year.
- Whether mortgage rates will move higher, lower or stay the same over the next year.
- Their level of concern over losing their job within the next year.
- How their monthly household income compares to what it was last year.
Higher mortgage rates expected
Nearly two-thirds (63%) of respondents said they believe it’s a good time to buy a house, and 47% think it’s a good time to sell.
More than half (54%) of respondents expect mortgage rates to increase over the next year, while just 5% believe rates will move lower.
“Expectations of rising mortgage rates and increasing concerns in the last six months about the direction of the economy seem to be weighing on consumers’ assessment of the housing market,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, says in a statement.
Getting ready to buy a home? Make sure you ask these 10 key questions at mortgage application time.
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