According to the Fannie Mae Home Purchase Sentiment Index (“HPSI”), potential buyers’ views on the housing market are looking good. The HPSI measures potential buyers’ perceptions, intentions, and attitudes about the 2020 housing market, borrowing 6 questions from the National Housing Survey (“NHS”).
In January, the HPSI increased by 1.3 points since November 2019, and 8.3 points since January 2019; the January HPSI came in at 93.0, which isn’t far off from being a record high for HPSI. Notably, 29% of those surveyed feel it’s a good time to buy a home (up from 15% in January 2019). More importantly, 45% of those surveyed believed it was a good time to sell as well (up from 35% in January 2019).
The leading theory as to why there is an increase in confidence in the housing market is that the mortgage rates have been dropping at a regular pace over the last 12 months. As we’ve mentioned numerous times, decreased mortgage rates are good for the housing market in general. However, market confidence may decrease as the housing shortage continues to impact the markets themselves. As it currently stands, housing inventory is at a historic low; California is already in the process of attacking this issue head on – we suspect California won’t feel much of an impact from this shortage.
At the Chernov Team we understand that knowledge is power, and knowledge of consumer sentiments is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.