While the mortgage rate expectations component remains negative on net – meaning more respondents than not anticipate mortgage rates to rise over the next year – 22% of consumers in April believe mortgage rates will decline, compared to only 12% in March.
However, Duncan warned that the bump in optimism may be temporary “as consumers continue to report uncertainty about the direction of home prices – and we know that high home prices remain the primary reason given by consumers who think it’s a bad time to buy a home.”
The net share of consumers who said home prices will go up over the year increased 5% month over month to 37%.
“Until affordability improves for a larger swath of the homebuying public, we believe home sales will remain subdued compared to previous years,” Duncan added.
Other HPSI component highlights: