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 Slides in June 2025: Fannie Mae’s HPSI Reflects Renewed Hesitation Amid Housing Market Uncertainty
The latest June 2025 data from the Fannie Mae Home Purchase Sentiment Index (HPSI) reveals a dip in consumer confidence, highlighting a housing market still struggling with affordability challenges, rate uncertainty, and mixed economic signals. After showing signs of cautious optimism in May, the HPSI fell to 69.8 in June—down from 73.5 the previous month. While still above 2023’s average of 65.3, the drop signals a meaningful shift in sentiment as summer approaches.
Since its inception, the HPSI has served as a reliable forward-looking gauge of housing market dynamics, distilling responses from six key questions into a single score that reflects Americans’ attitudes about buying, selling, price direction, interest rates, and financial stability. With June’s reading now below the 2024 monthly average of 72.5, the data points to a consumer base once again grappling with hesitation—and for good reason.
Buying Sentiment Edges Up Slightly—But Still Deep in Negative Territory
One of the most revealing figures this month: 28% of respondents said it’s a good time to buy, up from 26% in May and marking the highest level since early 2022. Yet 71% still believe it’s a bad time to buy, reflecting a persistently challenging affordability environment.
The net “good time to buy” reading for June stands at -43%, which, while improved from April’s -54%, remains historically low. For context, the HPSI’s buying optimism averaged 64% in 2015 and peaked in 2021 with a 66% “good time to buy” share during the sub-3% mortgage rate era.
This improvement, albeit modest, likely reflects a slight cooling in home prices and income gains rather than any large-scale shift in affordability. The long-term trend still shows a consumer base that is highly sensitive to borrowing costs, inventory availability, and overall financial strain.
Selling Conditions: Still Favorable, But Margins Narrowing
Sellers continue to see the market through a more optimistic lens. In June 2025, 60% of respondents said it was a good time to sell, compared to 38% who said it was not—a net +22%. This is a slight dip from May’s net +23%, yet far from the lows of 2020 when just 23% believed it was a good time to sell during early COVID uncertainty.
Homeowners who locked in historically low mortgage rates and are sitting on substantial equity remain in a position of strength. However, the gap between those who view it as a good time to sell versus those who don’t has narrowed slightly, suggesting growing sensitivity to shifting buyer demand and interest rate volatility.
Price Expectations Hold Steady—With More Believing in Future Appreciation
Home price expectations remained largely stable in June. Forty-five percent of respondents expect prices to increase over the next year, while 22% expect them to fall. This net +23% reflects a holding pattern of moderate optimism, identical to May’s 45% “prices will rise” reading.
Price expectation sentiment has recovered substantially from the lows of late 2023, when rising supply and affordability fatigue led to a more bearish outlook. Notably, the belief that prices will fall has also declined slightly (22% in June vs. 21% in May), implying more confidence in price resilience.
While dramatic gains like those of 2020–2021 appear behind us, the data suggests that consumers are adapting to a new normal: slower, more incremental appreciation, supported by tight inventory and stable employment.
Mortgage Rate Expectations Tilt Toward Increases Again
June saw a slight shift in rate sentiment. Thirty-four percent of respondents believe mortgage rates will rise in the next 12 months, while 25% expect them to fall, producing a net +9%—a notable increase from May’s net +3%.
This increase in pessimism about future rates could reflect persistent inflation concerns, uncertainty over future Federal Reserve policy, or the realization that rates may have reached a stubbornly high plateau.
Historically, the HPSI has shown that expectations of falling rates tend to coincide with upticks in buyer confidence. As of June, that optimism is waning slightly, potentially dragging down future buyer sentiment and activity unless economic indicators suggest rate relief.
Labor Market Confidence and Household Finances Remain Stable
Job security remains a bright spot in the sentiment index. In June 2025, 78% of employed respondents reported no concern about losing their job, holding steady from May’s 78%. Only 19% expressed concern, keeping the net job confidence level at a strong +59%.
This job market stability underpins resilience in consumer sentiment overall, especially for those considering large financial decisions like homeownership.
In terms of household income, 19% of respondents reported increased income compared to 12 months prior, while 10% said their income had decreased. The net +9% matches May’s level, continuing a trend of modest income growth that may help offset some affordability pressures.
Buying vs. Renting Intentions: Homeownership Still Preferred
When asked if they would buy or rent if they moved, 64% of respondents said they would buy—a slight decrease from May’s 68% but consistent with pre-pandemic norms. Thirty-five percent said they would rent.
This shift could indicate growing caution among potential buyers who may be reconsidering plans due to elevated prices or delayed rate relief. Nevertheless, the preference for homeownership remains strong and historically consistent.
Economic Outlook: Personal Confidence Rising, National Sentiment Remains Dim
On the broader economic front, respondents continue to view the U.S. economy pessimistically: only 34% said the economy was on the right track, while 64% said it was on the wrong track—a net -30%. While slightly improved from April’s -36%, the figure still reflects a widespread sense of national economic uncertainty.
Interestingly, personal financial expectations are much more optimistic. Forty-two percent of respondents expect their financial situation to improve over the next year, compared to 24% who expect it to worsen. This net +18% optimism suggests consumers are more confident about their own resilience than the broader economy.
Final Takeaway: June 2025 HPSI Reflects Uneven Recovery and Lingering Headwinds
June’s drop in the Home Purchase Sentiment Index signals that the recovery in consumer confidence remains fragile. The market is contending with a complex blend of steady job growth and wage gains alongside persistent affordability pressures and rate fears.
For real estate professionals, this means navigating a buyer pool that is highly price- and rate-sensitive, while also coaching sellers through shifting expectations about demand and pricing strategy. The data shows an American housing consumer who is hopeful but cautious—ready to engage, but not at any price or under any conditions.
As always, the Fannie Mae HPSI offers a window into what buyers and sellers are thinking, making it a key tool for gauging market direction and client mindset.
For the full June 2025 Fannie Mae Sentiment Report, scroll down to view the complete PDF.
