The Fannie Mae Home Purchase Sentiment Index increased in January, rising 1.2 points to 84.7 and paring some of its recent losses-- and down 4.8 points compared with the same time last year.

The increase can be attributed primarily to an eight-percentage point jump in the net share of Americans who reported substantially higher household income today compared to this time last year.

“Movement among the HPSI components points to possible housing affordability relief at the start of 2019,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The net share of consumers expecting home prices to increase over the next year has declined further, falling to the lowest level since late 2012. Meanwhile, consumer perceptions of household-income growth have improved, with the net share noting rising income over the past year hitting a survey high." The HPSI distills data about consumers’ home-purchase sentiment from Fannie Mae’s National Housing Survey into a single number.

Other takeaways gleaned from the index are:

• The net share of Americans who say it is a good time to buy a home increased 4 percentage points from last month to 15 percent. This component is down 12 percentage points from the same time last year.
• The net share of those who say it is a good time to sell a home decreased 1 percentage point to 35 percent. This component is down 3 percentage points from the same time last year.
• The net share of those who say home prices will go up fell 1 percentage point to 30 percent, declining for the fourth consecutive month. This component is down 22 percentage points from the same time last year.
• The net share of Americans who say mortgage rates will go down over the next 12 months increased 3 percentage points to 53 percent. This component is down 3 percentage points from the same time last year.
• The net share of Americans who say they are not concerned about losing their job decreased 6 percentage points to 73 percent. This component is unchanged from the same time last year.
• The net share of those who say their household income is significantly higher than it was 12 months ago increased 8 percentage points to 27 percent. This component is up 11 percentage points from the same time last year.

“Furthermore, fewer consumers since last summer, on net, believe that mortgage rates will rise over the next year--a sentiment consistent with the Fed’s statement at its January meeting that it will be patient with future target rate adjustments,” said Duncan. “Overall, these results are in line with our forecast that, amid improving affordability conditions, home sales should stabilize in 2019 after declining last year for the first time in four years.”