US Home Purchase Sentiment Index rises in July to fresh series high

US Fannie Mae’s Home Purchase Sentiment Index (HPSI) rose in July. The rise was widespread as all six index components increased in July. The Home Purchase Sentiment Index rose by 3.3 points in July to a fresh series high of 86.5. Each of the index’s six components rose in July. Stable rise in the index is in line with gradual recovery in housing, said Wells Fargo in a research note.

The home buyer sentiment is being underpinned by recovering economic conditions in the US. On a year-on-year basis, the net percent of consumers recording higher consumer income rose 3 percentage points to 11 percent. Also, consumers feel quite secure about their jobs, noted Wells Fargo.

In July, there was a rise in expectations for both home prices and rents. The index of rent has been at a higher level for quite a longer period of time. Increasing rents and lower mortgage rates seem to be encouraging purchase of homes. The ratio that would purchase if moving rose four percentage points to 67 percent. Consumers continue to anticipate mortgage rates to stay low, as the 'net percent reporting rates would rise' dropped 5 percentage points to 36 percent in July.