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Fading hopes that mortgage rates will come down in the next 12 months are denting consumer sentiment about housing market conditions for the first time since November, according to results of a March survey released Monday by Fannie Mae.
Fannie Mae’s Home Purchase Sentiment Index takes six questions from the mortgage giant’s more extensive monthly National Housing Survey and distills them into a single number.
The index dropped 0.9 points in March, to 71.9, even though the percentage of consumers who said it was a good time to buy or sell ticked up slightly in March, and most homeowners and renters said they felt confident that home prices aren’t about to crash.
Three other components of the index — job loss concerns and the outlook for household income and mortgage rates — decreased, bringing the overall index down by 1 percent.
Doug Duncan
“The HPSI remained relatively flat in March, but we’re seeing signs that consumers may be adjusting their expectations for the housing market to better accommodate the higher mortgage rate and home price environment,” Fannie Mae Chief Economist Doug Duncan said, in a statement that put a positive spin on the numbers.
Despite the dip in sentiment, most Americans surveyed in March (68 percent) said they would try to buy a home rather than rent if they were going to move, in line with past surveys.
“We noted in our latest monthly forecast that we expect to see a gradual increase in home listings and sales transactions in the coming year,” Duncan said. “We believe this will be driven not only by those coming off the sidelines due to a rate-related…