Consumers’ feelings towards the housing market were weaker in the month of October than they were in September, as some consumers displayed hesitancy to commit to the long-term financial obligation of buying a home, a new survey from Fannie Mae showed.
Released Monday, Fannie Mae’s Home Purchase Sentiment Index for October 2015 decreased slightly to 83.2 in October as consumers’ volatile outlook on both household income improvement and mortgage interest rates kept housing sentiment relatively flat.
In October, the HPSI Household Income component fell 4 points on net this month and the Good Time to Buy and Good Time to Sell components fell 2 and 6 points, respectively, after picking up in September.
While those number fell in October, signifying weakening confidence in the housing market, the survey results showed that consumers appeared to be less worried about job loss, with the net figure nearing the most favorable reading in the five-year history of Fannie Mae’s National Housing Survey.
Additionally, the share of consumers who think mortgage interest rates will go down increased by 4 points on net in October.
“The income growth necessary for renewed momentum in housing market sentiment remains elusive, even though consumers’ confidence in their job security continues to strengthen,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.
“Consumers’ net view on whether their household income has improved over the last year is down once again this month,” Duncan continued.
“Some consumers may be hesitant or unwilling to commit to buying or selling a home without seeing meaningful improvement in their wages and salaries,” Duncan added. “Still, the HPSI remains close to its near all-time high level of the past four years and, given the strong October jobs report, suggests that any cooling in near-term activity, if it occurs, should be moderate.”
Overall, Fannie Mae’s October 2015 Home Purchase Sentiment Index decreased 0.6 percentage points to 83.2 in October following a 3-point increase last month to near its peak level.
The net share of respondents who say they are not concerned with losing their job rose 2 percentage points to 71%, and has risen each month since July. The percent of respondents who are not concerned about losing their job reached an all-time high of 85%.