It's Spring--Must Be Time to Sell Houses!

The net number of consumers who told Fannie Mae surveyors in April they think it is currently a good time to sell a house soared in April.  However, its impact on Fannie Mae's Home Purchase Sentiment Index (HPSI) was muted by lower net responses to some other survey components. 

The HPSI increased 3.5 points to 83.7 after setting a new low in March.  The increase was driven by a 16-point net increase in the net number of respondents to Fannie Mae's National Housing Survey (NHS) who thought it was currently a good time to sell a house.

Despite the spike in that specific response Fannie Mae said overall consumer housing sentiment has remained generally flat.  The HPSI is calculated from responses to six of the more than one hundred questions asked by the monthly NHS.

The Good Time to Buy component of the index dipped to an all-time survey low, creating the narrowest gap on record between the Good Time to Buy and Good Time to Sell measures. In addition, although the net share of consumers reporting confidence about not losing their job rose 6 percentage points, the net share of consumers reporting that their income was significantly higher than it was 12 months ago stayed flat from the prior month. The component indicating expectations that home prices will increase rose 3 points and the one measuring expectation that mortgage rates would go down declined by 1.

"We can partially attribute the sizable gain in April in home selling optimism both to a correction for last month's unexpected dip and to typical seasonal strength in housing activity in the spring and summer," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Even after accounting for these factors, continued tight housing supply has led to renewed strength in home price appreciation, making selling a home a more attractive prospect this year in particular. This improved sentiment could provide an extra boost of much-needed supply for the spring selling season."