Home selling confidence continues to rise in June

A record high share of respondents in Fannie Mae's National Housing Survey considered it a good time to sell a home in June. However, overall sentiments toward the economy dipped on moderating economic perceptions and continuing wariness toward home buying conditions.

The Home Purchase Sentiment Index for the month stood at 90.7. While this reading was up from 88.3 in June 2017, it was down 1.6 points from a survey high in the previous month. The index is based on six factors in the National Housing Survey, including perceptions on whether it is a good time to buy or sell, job confidence, changes in household income, and expected changes to home prices and mortgage rates.

Fannie Mae said respondents were slightly more concerned about their job security, with a smaller net share reporting an increase in their household income. Respondents were also less likely to expect mortgage rates to go down and more likely to think home prices will decrease.

"After several years of steadily climbing, HPSI's slowing upward trend suggests the index may be reaching a plateau," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Tight supply and lackluster income growth continue to weigh on housing activity, and consumer expectations for home price growth over the next 12 months have moderated. However, consumers expressed increased optimism about the direction of the economy and their personal financial situations over the next 12 months, with both measures matching previous survey highs this month."

Sixty-nine percent of respondents thought it was a good time to sell a home, up 2 percentage points from the previous month and 5 percentage points from the previous year. Twenty-two percent considered it a bad time to sell, up 1 percentage point from May but a year-over-year drop of 3 percentage points.

Perceptions toward home buying showed no change from May, with 59 percent considering it a good time to buy a home and 31 percent considering it a bad time. In June 2017, 62 percent thought it was a good time to buy and 32 percent thought it was a bad time.

Fifty-five percent said they think home prices will go up in the next 12 months, unchanged from the previous two months and up 1 percentage point from the previous year. Nine percent said they expect home prices to drop, up 3 percentage points from May and 1 percentage point from June 2017.

On average, respondents said they expect home prices to rise 2.6 percent over the next 12 months. This was down from expectations of 3.5 percent growth in May and 3.4 percent growth in June 2017.

Fifty-eight percent said they believe mortgage rates will go up over the next 12 months, a year-over-year increase of 1 percentage point and up 4 percentage points from May. Five percent said they think rates will go down, a drop of 1 percentage point from the previous month and 3 percentage points from the previous year.

Respondents were less likely to expect rents to increase, with 54 percent saying they expect them to go up in the next 12 months – down from 61 percent in the previous two months and 58 percent in June 2017. Four percent said they think rents will decrease, unchanged from the previous year and up 2 percentage points from May.

The average respondent said they expect rents to climb 4 percent over the next 12 months. This was down from 4.6 percent in the previous month and 4.8 percent in the previous year.

Respondents continued to favor buying to renting, with 68 percent saying they would purchase their next home if they were to move – up from 67 percent in both the previous month and previous year. The share of respondents indicating that they would rent fell from 28 percent in June 2017 and 29 percent in May to 26 percent.

Fifty-eight percent said they thought it would be easy for them to get a mortgage, up 2 percentage points from May but down 1 percentage point from June 2017. Thirty-eight percent said they thought it would be difficult to get a mortgage, a year-overyear increase of 1 percentage point but a drop of 3 percentage points from May.

Eighty-eight percent said they were not concerned about losing their job in the next 12 months, a drop of 1 percentage point from