Housing sentiment pulls up in August after July stumble

Fannie Mae's Home Purchase Sentiment Index jumps 3.3 points in August to 77.5, resuming its May-June rebound after faltering in July.

Five of six HPSI components increased M/M, with consumers expressing a more optimistic view of both homebuying and home-selling conditions, although a slightly more pessimistic view of expected home price growth.

Y/Y, the HPSI is down 16.3 points.

"The HPSI's recovery was driven by near-record low mortgage rates that helped restore much of consumers' positivity on whether it is a good time to buy a home, while also improving the good-time-to-sell sentiment," said Fannie Mae Senior Vice President and Chief Economist Doug Duncan.

He notes that the August survey was conducted as consumers faced uncertainty regarding schools and businesses reopening and as the CARES Act's $600/week supplemental unemployment insurance benefit expired.

The percentage of respondents who said it's a good time to buy a home increased to 59% in August from 53% in July, while the percentage who said it's a bad time to buy decreased to 35% from 38%.

The percentage of respondents who said it's a good time to sell a home rose to 48% from 45% and the percentage who said it's a bad time to sell fell to 44% from 48%.

Some 33% of respondents said they expect home prices to rise in the next year vs. 35% in July, while 26% said home prices will decline vs. 23% in the prior survey.