Consumer sentiment about the housing market improved in May to the highest level since November as Americans became more optimistic about buying and selling conditions and the prospects for mortgage rates to come down in the year ahead.
Fannie Mae’s latest National Housing Survey, released Monday, showed five of six components of the mortgage giant’s Home Purchase Sentiment Index (HPSI) improved in May.
Consumer sentiment has been trending down this year, in part due to fears about the impact of the Trump administration’s tariff policies, but the economy continues to do better than surveys suggest, economists say.
Fannie Mae Home Purchase Sentiment Index
Source: Fannie Mae National Housing Survey, May 2025.
At 73.5, the HPSI was up 4.3 points from April to May, surpassing the previous 2025 high of 73.4 seen in January.
The HPSI — which hit an all-time low of 56.7 in October 2022 in records dating to 2011 — distills six questions from Fannie Mae’s monthly National Housing Survey into a number.
The latest survey, which was fielded from May 1 through May 20 to 1,345 household decision makers, found that while most Americans still think it’s not a good time to buy, sentiment is improving.
With Americans also less worried about losing their jobs in May, the only HPSI component that didn’t improve was household income.
Source: Fannie Mae National Housing Survey, May 2025.
While only 26 percent of household decision-makers said May was a good time to buy, that’s up from 23 percent in April and 14 percent a year ago — an all-time survey low.
With the share who said May was a bad time to buy falling from 77 percent in April to 74 percent in May, the net share of consumers who said it was a good time to buy increased by seven percentage points, to -48 percent.
More than two-thirds of consumers surveyed (68 percent) said they’d buy rather than rent if they were going to move, up from 65 percent in April.
Source: Fannie Mae National Housing Survey, May 2025.
Most consumers (61 percent) said May was a good time to sell, up from 58 percent in April but down from 64 percent a year ago. With the share who said it was a bad time to sell falling from 41 percent in April to 38 percent in May, the net share of consumers who said May was a good time to sell increased by six percentage points, to 23 percent.
Source: Fannie Mae National Housing Survey, May 2025.
With more consumers convinced that prices are headed up in the next 12 months (45 percent) or that they’ll stay the same (34 percent), the net share of consumers who expect prices to go up rose three percentage points, to 24 percent.
While many would-be homebuyers are hoping prices come down, Fannie Mae’s HPSI treats expectations of price increases as a positive, since it shows consumers aren’t worried about prices crashing.
Source: Fannie Mae National Housing Survey, May 2025.
Most consumers surveyed in May said they expect mortgage rates to either stay the same over the next 12 months (38 percent) or go down (29 percent).
With the share who expect rates to go up falling from 36 percent in April to 32 percent in May, the net share expecting rates to go down improved by seven percentage points, to -2 percent.
Last month, Fannie Mae economists said they expect mortgage rates to come down by a full percentage point by the end of next year. Forecasters at the Mortgage Bankers Association have issued a more cautious take.
MBA forecasters predict mortgage rates will still be averaging 6.6 percent during Q4 2025 and 6.3 percent during Q4 2026.
Source: Fannie Mae National Housing Survey, May 2025.
Only one in five employed respondents surveyed in May (22 percent) said they were worried about losing their job in the next 12 months, down from 25 percent in April and a 2025 high of 32 percent in March.
With 76 percent of employed consumers saying they weren’t concerned about losing their job, the net share who said they weren’t concerned about being unemployed increased by five percentage points, to 54 percent.
Source: Fannie Mae National Housing Survey, May 2025.
Most consumers surveyed in May (70 percent) said their household income is about the same as it was 12 months ago. But 10 percent said it was significantly lower, up from 8 percent in April, but down from 12 percent a year ago.
The net share of consumers who said their income was higher than 12 months ago fell three percentage points from April to May, to 9 percent.
Source: Fannie Mae National Housing Survey, May 2025.
Although not factored into the HPSI, the National Housing Survey asks household decision-makers if they think the economy is on the right or the wrong track.
While most consumers thought the economy was on the wrong track in May (64 percent), that’s down from 67 percent in April and 74 percent a year ago.
