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Seller optimism drops on economic nerves

WASHINGTON – April 11, 2016 – The inventory of for-sale homes might get even tighter.
A new poll from Fannie Mae shows a large drop in the number of consumers who think now is a good time to sell a home. Fannie Mae’s Home Purchase Sentiment Index (HPSI), a survey of 1,000 Americans, saw decreased 2.5 points to 80.2 in March. Four of the six HPSI components showed a March drop as the survey revealed a more negative consumer outlook on the economy.
The largest drop was the share of consumers who think it’s a good time to sell a home, which fell by 8 percentage points. Despite the Bureau of Labor Statistics’ March employment report showing strong job creation and continued expansion of the labor force, HPSI respondents surveyed in March noted that their confidence about not losing their job decreased 7 percentage points, falling from an all-time survey high in February.
In addition, the Household Income component fell 4 percentage points with fewer consumers reporting that their income was significantly higher than it was 12 months ago.
“Growing pessimism over the last three months about the direction of the economy seems to be spilling over into home-purchase sentiment,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “The gap between the share of consumers who think the economy is on the wrong track and the share who think it is on the right track has widened, nearly matching its reading last August, when concerns regarding China and oil prices led to the biggest stock market plunge in years.
“In turn, we saw dips this month in income-growth perceptions, attitudes about the home-selling climate, and job confidence – all of which contributed to the lowest HPSI reading in the last year and a half,” he says.
HPSI March highlights
The March HPSI is down 1.5 points year-to-year
The share of respondents who say that it’s a good time to buy a house fell 2 percentage points to 33%; more Americans say it’s a bad time to buy
The percentage who say it’s a good time to sell a house fell 8 percentage points to negative 1% – for the first time in a year, more felt it was a bad time to sell than a good time
The share of respondents who say that home prices will go up rose 1 percentage point to 34%, breaking a downward trend from the last few months
The net share of those who say mortgage interest rates will go down rose 5 percentage points, but it’s still at negative 45%, so fewer consumers think mortgage rates will go down
The share of respondents who say they’re not concerned with losing their job fell 7 percentage points to 68%
The net share of respondents who say their household income is significantly higher than it was 12 months ago fell 4 percentage points to 11%
© 2016 Florida Realtors®
Source: Florida Realtors Feed

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