Fannie Mae's Home Purchase Sentiment Index decreased 2.5 points to 80.2 in March. Four of the six HPSI components fell in March, and the survey shows a more negative consumer outlook on the direction of the economy. The largest drop among the HPSI components was the net share of consumers who think now is a good time to sell a home, which fell by 8 percentage points. Despite the Bureau of Labor Statistics' March employment report showing strong job creation and continued expansion of the labor force, HPSI respondents surveyed in March noted that their confidence about not losing their job decreased 7 percentage points on net and fell from an all-time survey high in February. In addition, the Household Income component fell 4 percentage points on net with fewer consumers reporting that their income was significantly higher than it was 12 months ago.

"Growing pessimism over the last three months about the direction of the economy seems to be spilling over into home purchase sentiment," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "The gap between the share of consumers who think the economy is on the wrong track and the share who think it is on the right track has widened, nearly matching its reading last August, when concerns regarding China and oil prices led to the biggest stock market plunge in years. In turn, we saw dips this month in income growth perceptions, attitudes about the home selling climate, and job confidence, all of which contributed to the lowest HPSI reading in the last year and a half. These declines seem to be at odds with recent news of solid overall job creation, but may reflect weakening economic performance in certain industries."

HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS

Fannie Mae's March 2016 Home Purchase Sentiment Index fell 2.5 percentage points in March to 80.2. Overall, the HPSI is down 1.5 points since this time last year.

• The net share of respondents who say that it is a good time to buy a house fell 2 percentage points to 33% as more Americans say it is a bad time to buy.

• The net percentage of those who say it is a good time to sell a house fell 8 percentage points to negative 1%, as more feel it is a bad time to sell than a good time to sell for the first time in over a year.

• The net share of respondents who say that home prices will go up rose 1 percentage point to 34%, breaking the downward trend from the last few months.

• The net share of those who say mortgage interest rates will go down rose 5 percentage points to negative 45% this month, as fewer consumers say mortgage rates will go down, continuing the trend from February.

• The net share of respondents who say they are not concerned with losing their job fell 7 percentage points to 68%.

• The net share of respondents who say their household income is significantly higher than it was 12 months ago fell 4 percentage points to 11%.