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60 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT Fannie Mae: Home Sellers Benefit From 'Perfect Storm' A study gauging consumer sentiment has found that now is the time to sell a home, with short supply and high demand continuing to drive prices upward. F annie Mae's latest Home Purchase Sentiment Index (HPSI) decreased by just 0.3 points in June to 79.7, despite even greater volatility among the Index's underlying components, up 3.2 points com- pared to the same time last year. The HPSI's "Good Time to Buy" and "Good Time to Sell" components once again produced the most notable results. On the buy-side, 64% of respondents said it was a bad time to buy a home, up from 56% last month. On the sell-side, 77% of respon- dents said it's a good time to sell, up 10 percentage points from 67% last month. The components more closely associated with household finances were largely flat month over month, but remain elevated compared to this time last year, particularly the component regard- ing job security. Year over year, the overall index is up 3.2 points. "The HPSI remained flat this month, although its underlying buy and sell components con- tinued to diverge, setting record positive and negative readings, respectively," said Doug Duncan, Fannie Mae SVP and Chief Economist. "Consumers also con- tinued to cite high home prices as the predominant reason for their ongoing and significant divergence in sentiment toward homebuy- ing and home-selling conditions. While all surveyed segments have expressed greater negativity toward homebuying over the last few months, renters who say they are planning to buy a home in the next few years have demonstrated an even steeper decline in home- buying sentiment than homeown- ers. It's likely that affordability concerns are more greatly affecting those who aspire to be first-time homeowners than other consumer segments who have already estab- lished homeownership." The percentage of respondents who say home prices will go up in the next 12 months increased from 47% to 48%, while the percentage who say home prices will go down increased from 17% to 21%. The share of respondents who think home prices will stay the same decreased from 29% to 25%. As a result, the net share of Americans who say home prices will go up decreased three per- centage points month over month. "Despite the pessimism in homebuying conditions, we expect demand for housing to persist at an elevated level through the rest of the year," Duncan said. "Mortgage rates remain not too far from their historical lows, and consumers are expressing even greater confidence about their household income and job situation compared to this time last year, when the pandemic had shut down wide swaths of the economy." In terms of mortgage rates, the number of respondents who feel rates will drop in the next 12 months remained unchanged at 6%, while the percentage who expect rates to rise increased from 49% to 57%. The share who think mortgage rates will stay the same decreased from 38% to 30%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months decreased eight percentage points month over month. Two bright spots driving the economy as it enters Q 3 can be found in recent reports from the Bureau of Labor Statistics (BLS) and Department of Labor. The BLS has reported that the American economy added 850,000 jobs in the month of June, while the Department of Labor reported that for the week ending June 26, the advance figure for seasonally adjusted initial unemployment claims was 364,000, a decrease of 51,000 from the previous week's revised level, marking the lowest level for initial claims since March 14, 2020, when it was 256,000. The percentage of HPSI respon- dents who said they were not con- cerned about losing their job in the next 12 months increased from 87% to 88%, while the percentage who say they were concerned decreased from 12% to 11%. As a result, the net share of Americans who say they are not concerned about losing their job increased two percentage points month over month.