Fannie Mae Home Purchase Sentiment Index
The Fannie Mae Home Purchase Sentiment Index® (HPSI) is a key indicator of consumer sentiment in the housing market. Derived from Fannie Mae’s National Housing Survey®, the HPSI condenses consumer opinions on housing market conditions, making it a vital tool for anyone interested in real estate trends.
Consumer Sentiment Rebounds in July 2025: Fannie Mae’s HPSI Shows Modest Recovery but Mixed Market Signals
The latest July 2025 data from the Fannie Mae Home Purchase Sentiment Index (HPSI) shows a slight improvement in consumer confidence, signaling a housing market still wrestling with affordability challenges, rate uncertainty, and uneven demand. After dropping to 69.8 in June, the HPSI ticked up to 71.8 in July. While this is still below the 2024 monthly average of 72.5, it reflects a mild recovery in sentiment as summer progresses.
The HPSI distills six key housing market questions—covering buying and selling conditions, price direction, interest rates, job security, and personal finances—into a single measure of housing confidence. This month’s increase shows consumers are feeling slightly better than in June, but the index remains well under the peaks seen during low-rate years.
Buying Sentiment Slips Again—Still Deep in Negative Territory
In July, only 23% of respondents said it’s a good time to buy, down from 28% in June. Meanwhile, 77% said it’s a bad time to buy. The net “good time to buy” reading dropped to -54%, erasing the slight optimism seen in early summer. For context, buying optimism averaged 64% in 2015 and reached as high as 66% during the sub-3% mortgage rate era in 2021. Today’s numbers reflect a consumer base still constrained by high borrowing costs, tight supply, and elevated home prices. This pullback suggests that affordability pressures remain the main obstacle for buyers, despite a stable job market and some wage growth.
Selling Conditions Hold Steady—Still Favorable for Many
Seller confidence remains stronger than buyer sentiment. In July, 60% of respondents said it was a good time to sell, compared to 39% who said it was not—a net +21%. This is virtually unchanged from June’s net +22%. Homeowners who locked in historically low mortgage rates and have built up equity continue to hold an advantage. However, the gap between those who believe it’s a good time to sell and those who don’t has narrowed over the past year, showing that some sellers are starting to sense softer buyer demand.
Price Expectations: Slight Uptick in Optimism
Price outlooks improved slightly in July. Forty-six percent of respondents expect home prices to rise over the next year, while 18% expect them to fall, producing a net +28%—up from June’s +23%. This suggests growing confidence in price resilience, likely due to persistent low inventory and a still-competitive market in many regions. While few expect the rapid appreciation seen in 2020–2021, the data indicates most consumers believe steady, moderate price growth is the new normal.
Mortgage Rate Expectations Shift Slightly
When it comes to interest rates, consumers are divided. In July, 32% of respondents believe mortgage rates will rise over the next 12 months, while 28% expect them to fall, creating a net +4%—a notable drop from June’s net +9%. The smaller gap suggests consumers are less certain about the rate outlook. Persistent inflation concerns and Federal Reserve policy uncertainty continue to weigh on expectations. Historically, optimism about falling rates tends to boost buyer sentiment, so this flattening may be a headwind for demand.
Job Security and Household Finances Stay Strong
The job market remains a stabilizing factor for housing sentiment. In July, 78% of employed respondents reported no concern about losing their job, while only 19% expressed concern—keeping net job confidence at +59%, the same as in June. Household finances also remain relatively stable. Nineteen percent of respondents said their income is higher than a year ago, while 10% reported a decrease, holding net income growth at +9%. This modest wage growth is helping some buyers offset affordability challenges.
Buying vs. Renting: Homeownership Preference Strengthens
The share of consumers who said they would buy if they moved rose to 66% in July, up from 64% in June. Renting preference fell to 33%. This reinforces the long-term trend that homeownership remains the preferred choice, even in a market where affordability is stretched. It also suggests that demand could rebound quickly if borrowing costs ease.
Broader Economic Outlook: Personal Confidence Outpaces National Optimism
National economic sentiment remains low, with only about one-third of respondents believing the economy is on the right track. However, personal financial expectations are more optimistic—42% expect their financial situation to improve in the next year, compared to 24% who expect it to worsen. This gap between personal and national outlooks suggests consumers may be cautious about macroeconomic risks but still confident in their own ability to manage financially.
Final Takeaway: July’s HPSI Shows Stabilization, but Affordability Still Dominates
July’s HPSI rebound from June’s dip points to a market where confidence is stabilizing—but not surging. Strong job security and personal financial confidence are providing a foundation, yet high mortgage rates and home prices continue to limit buying activity. For real estate professionals, the message is clear: today’s buyers are highly sensitive to affordability changes, and sellers may need to adapt pricing strategies to attract offers in this environment. The housing market is in a holding pattern, with steady employment supporting demand potential, but affordability constraints keeping many on the sidelines.
For the full July 2025 Fannie Mae Sentiment Report, scroll down to view the complete PDF.
