Fannie Mae Introduces Home Purchase Sentiment Index

John Jordan | September 2015

WASHINGTON, DC – Fannie Mae’s Economic & Strategic Research Group announced on Sept. 8 the launch of the Fannie Mae Home Purchase Sentiment Index, which distills results from its consumer-focused National Housing Survey into a single, monthly, predictive indicator.

Reflecting more than four years of data, the HPSI is designed to provide distinct signals about the direction of the housing market, helping industry participants to make better informed business decisions.

Unlike existing general indices of consumer economic sentiment, the HPSI is devoted entirely to housing. The index is constructed from answers to six key NHS questions that solicit Americans’ evaluations of housing market conditions and addresses topics related to their home purchase decisions. These questions ask consumers whether they think it is a good or bad time to buy or to sell a house, the direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier. The Economic & Strategic Research Group expects to release the HPSI on the seventh day of each month or the first business day afterward.

“The Fannie Mae Home Purchase Sentiment Index provides the market a single number to track consumer attitudes focused on the housing market,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Utilizing our National Housing Survey, the only consumer sentiment survey of its kind focused on housing, the HPSI will offer insights regarding current and future-looking housing market outcomes and will complement existing data sources to inform housing-related analysis.”

“Consumer attitudes toward the current home selling climate have slid back to their April 2015 level, contributing to a slight decline in the August HPSI reading relative to its four-year high, reached two months ago,” said Duncan. “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.”

John Jordan
Editor, Real Estate In-Depth