Confidence in housing is at a new peak, with enthusiasm among sellers soaring, according to the April Fannie Mae Home Purchase Sentiment Index® (HPSI). At 91.7, the Index plowed through its previous record, climbing 3.4 percentage points month-over-month and five points year-over-year.
“The latest HPSI reading edged up to a new survey high, showing that consumer attitudes remain resilient going into the spring/summer home-buying season,” says Doug Duncan, chief economist and senior vice president at Fannie Mae.
What is driving the lift? Americans are optimistic about their prospects for selling, with 45 percent believing now is ideal to list—a high point since the start of the survey. By the same token, almost half (49 percent) of Americans believe home prices will rise—conditions that, for sellers, translate to an upper hand.
Confidence can dissipate, however, if inventory remains sparse, according to Duncan.
“High home prices and good economic conditions helped push the share of Americans who think it’s a good time to sell to a fresh record-high; however, the upward trend in the good-time-to-sell share seen since last spring has done little to release more for-sale inventory,” Duncan says. “The tightest supply in decades, combined with rising mortgage rates from historically low levels, will likely remain a hurdle for mobility and a persistent headwind for home sales.”
Despite constrained inventory, sales are strengthening, with both existing and pendingsales squeezing out wins in March, the National Association of REALTORS® (NAR) reported—and, according to the Commerce Department, new-home sales tracked up.