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Consumer Housing Sentiment Down Year over Year for First Time Since 2023

1. Fannie Mae's HPSI fell 1.8 points to 71.6 in February. 2. Consumers' pessimism about mortgage rates contributed to declining sentiment. 3. Only 24% of consumers feel it's a good time to buy a home. 4. Concerns about personal finances are increasing among consumers. 5. Overall home sales are expected to remain low due to affordability issues.

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FAQ

Why Bearish?

The decline in consumer sentiment, particularly toward mortgage rates, suggests decreased demand for FNMA’s products. Historically, declining sentiment correlates with lower home sales and mortgage activity, negatively affecting FNMA’s revenue.

How important is it?

The HPSI's decline directly reflects consumer attitudes affecting FNMA's core business operations. Persistent pessimism can hinder FNMA's growth prospects significantly, making this information critical for FNMA's investors.

Why Short Term?

The immediate decline in sentiment may lead to reduced home purchases and refinancing activity, impacting FNMA’s performance over the next few quarters. Housing market perspectives can shift quickly, based on economic conditions.

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Pessimism Toward Mortgage Rates and Personal Financial Situations Grows WASHINGTON, March 7, 2025 /PRNewswire/ -- The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index® (HPSI) decreased 1.8 points in February to 71.6, driven largely by consumers' increased pessimism that mortgage rates will go down in the next year. The share of consumers who say it is a good time to buy a home inched up last month to 24%, while the share who say it is a good time to sell dipped to 62%. February also saw a notable decline in consumers' optimism toward their personal financial situation, including household income and concern they could lose their job. Year over year, the HPSI is down 1.2 points. "In February, the HPSI saw its first year-over-year decline in nearly two years, which was mostly due to a shrinking share of consumers expressing optimism about the direction of mortgage rates," said Mark Palim, Fannie Mae Senior Vice President and Chief Economist. "This growing pessimism makes sense, as mortgage rates had remained near the 7% threshold for a few months, including when we fielded this survey. The decline in sentiment was further impacted by consumers' growing concerns about their own personal financial situations. While some consumers may be slowly acclimating to the higher mortgage rate environment, the vast majority continue to believe it is a 'bad time' to buy a home – with high home prices cited as the primary sticking point. We continue to expect home sales activity to remain relatively light over our forecast horizon due to the ongoing lack of supply and overall unaffordability." Home Purchase Sentiment Index – Component Highlights Fannie Mae's Home Purchase Sentiment Index (HPSI) decreased 1.8 points in February to 71.6. The HPSI is down 1.2 points compared to the same time last year. Read the full research report for additional information. About Fannie Mae's Home Purchase Sentiment IndexThe Home Purchase Sentiment Index® (HPSI) distills information about consumers' home purchase sentiment from Fannie Mae's National Housing Survey® (NHS) into a single number. The HPSI reflects consumers' current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision-making. The HPSI is constructed from answers to six NHS questions that solicit consumers' evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what 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 or lower than they were a year earlier. About Fannie Mae's National Housing SurveyThe National Housing Survey (NHS) is a monthly attitudinal survey, launched in 2010, which polls a representative sample of adult household financial decision makers in the United States, to assess their attitudes toward owning and renting a home, purchase and rental prices, household finances, and overall confidence in the economy. Each respondent is asked more than 100 questions, making the NHS one of the most detailed longitudinal surveys of its kind to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to support the housing market. The February 2025 National Housing Survey was conducted between February 1, 2025, and February 18, 2025. Most of the data collection occurred during the first two weeks of this period. The latest NHS was fielded through AmeriSpeak®, NORC at the University of Chicago's probability-based panel, in coordination with Fannie Mae and PSB Insights. Calculations are made using unrounded and weighted respondent-level data to help ensure precision in NHS results from wave to wave. As a result, minor differences in calculated data (summarized results, net calculations, etc.) of up to 1 percentage point may occur due to rounding. Detailed HPSI & NHS FindingsFor detailed findings from the Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results. To receive e-mail updates with other housing market research from Fannie Mae's Economic and Strategic Research Group, please click here. About the ESR GroupFannie Mae's Economic and Strategic Research Group, led by Chief Economist Mark Palim, studies current data, analyzes historical and emerging trends, and conducts surveys of consumer and mortgage lender groups to provide forecasts and analyses on the economy, housing, and mortgage markets. Follow Fannie Maefanniemae.com | X (formerly Twitter) | Facebook | LinkedIn | Instagram | YouTube | Blog Fannie Mae Newsroomhttps://www.fanniemae.com/news Photo of Fannie Maehttps://www.fanniemae.com/resources/img/about-fm/fm-building.tif Fannie Mae Resource Center1-800-2FANNIE Opinions, analyses, estimates, forecasts, beliefs, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group or survey respondents included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, beliefs, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, beliefs, and other views published by the ESR Group represent the views of that group or survey respondents as of the date indicated and do not necessarily represent the views of Fannie Mae or its management. SOURCE Fannie Mae

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