The Fannie Mae Home Purchase Sentiment Index decreased in October, falling 2.0 points to 85.7.

The decline is attributed to decreases in five of the six components, including those measuring home buying and selling attitudes of consumers. The HPSI has trended downward, since hitting a survey high in the spring, declining in October to its lowest level in a year.

“The further erosion of buying sentiment occurred despite generally positive views of the economy,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Among those who said it’s a good time to buy, 30 percent, a record high, cited favorable economic conditions as the reason. Meanwhile, the share of consumers who think the economy is on the right track continued to grow, reaching a new survey high.”

The net share of Americans who said it is a good time to buy a home fell 5 percentage points, and the net share who said it is a good time to sell a home fell 3 percentage points. Meanwhile, the net share of survey respondents who expect home prices to go up fell 2 percentage points, and the net share who expect mortgage rates to go down fell 1 percentage point.

Last, respondents also expressed a slightly more pessimistic view on job security, with the net share who are confident about not losing their job falling by 1 percentage point.

While the October drop was broad-based, with five out of six HPSI components having declined, the net share of consumers who said it’s a good time to buy a home posted the largest decrease, tying the second lowest reading since the survey began.

HOME PURCHASE SENTIMENT INDEX HIGHLIGHTS

Fannie Mae’s 2018 Home Purchase Sentiment Index decreased in October by 2 points to 85.7. The HPSI is up 0.5 points compared with the same time last year.

• The net share of Americans who say it is a good time to buy a home 21%, declined 5 percentage points from last month.
• The net share of those who say it is a good time to sell a home, 35%, dropped 3 percentage points.
• The net share of those who say home prices will go up, 37%, dropped 2 percentage points.
• The net share of Americans who say mortgage rates will go down over the next 12 months, 57%, dropped 1 percentage point.
• The net share of Americans who say they are not concerned about losing their job, 78%, fell 1 percentage point.
• The net share of those who say their household income is significantly higher than it was 12 months ago, 19%, remained unchanged.

"The contrast between the survey’s findings of weak home buying sentiment and overall economic optimism mirrors what we’re seeing in the broader economy," said Duncan. "While economic growth posted the fastest back-to-back pace in four years in the third quarter, residential investment declined for the third consecutive quarter, a first for the current expansion.”