The national housing mood remained flat last month, according to the latest Home Purchase Sentiment Index (HPSI) released by Fannie Mae. Despite easing mortgage rates early in September, consumer confidence around buying or selling a home showed little change from August.
Consumer Confidence Stalls
The HPSI held at 71.4 in September, unchanged from the previous month and 2.5 points lower than a year ago. Fannie Mae’s survey found that only 27 percent of consumers believed it was a good time to buy, down from 28 percent in August. The share of respondents who felt it was a good time to sell also slipped slightly, from 58 percent to 57 percent.
The results suggest that while recent mortgage rate drops offered temporary relief, many households remain cautious about affordability and future rate trends. “Consumers’ hesitance reflects ongoing uncertainty about where housing costs and borrowing rates are headed,” the report stated.
Affordability Concerns Persist
Optimism about housing affordability continued to fade. Roughly 30 percent of respondents expected mortgage rates to rise over the next 12 months, up from 26 percent in August. Meanwhile, 40 percent said they anticipate home prices will climb during the same period, reinforcing concerns about limited affordability for first-time and lower-income buyers.
In regions like the San Gabriel Valley, where housing costs remain among the most burdensome in Los Angeles County, the sentiment aligns with local market pressures. Many prospective buyers continue to face steep competition for limited listings, even as rates show short-term improvement.
Labor Market Adds a Note of Stability
One modestly positive sign came from the employment front. The share of working consumers worried about losing their job fell from 27 percent in August to 25 percent in September, suggesting that households feel slightly more secure in their current positions.
However, Fannie Mae analysts cautioned that job market softening could weigh on confidence in the months ahead. “With labor market weakness emerging, renewed job loss concerns could negatively impact housing sentiment in the near term,” the report noted.
Looking Ahead
Economists expect the Home Purchase Sentiment Index to remain under pressure through the fall, as affordability challenges continue to limit demand. In Southern California, real estate agents say many buyers are waiting for clearer signals on long-term mortgage rate trends before reentering the market.
While the latest figures show no immediate improvement in consumer attitudes, stable employment and gradual rate adjustments may help prevent further declines in sentiment heading into the end of the year.
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