Consumers’ outlook on the direction of the economy got a little gloomier in March, according to Fannie Mae’s Home Purchase Sentiment Index (HPSI).
The index, which measures consumer sentiment in six categories, decreased 2.5 points from February to reach a score of 80.2.
The net share of consumers who think now is a good time to sell a home fell by eight percentage points to -1.0%. What’s more, the net share of respondents who say it is a good time to buy a house fell two percentage points to 33%.
In addition, the number of respondents who expressed confidence about not losing their job decreased seven percentage points on net, down from an all-time survey high in February. This is surprising considering that the Bureau of Labor Statistics’ employment report for March shows strong job creation and continued expansion of the labor force.
In addition, the number of consumers reporting that their income was significantly higher than it was 12 months earlier fell four percentage points.
Overall, it was the lowest total index score in 18 months, Fannie Mae reports.
“Growing pessimism over the last three months about the direction of the economy seems to be spilling over into home purchase sentiment,” says Doug Duncan, senior vice president and chief economist at Fannie Mae, in a statement. “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,” he adds. “These declines seem to be at odds with recent news of solid overall job creation but may reflect weakening economic performance in certain industries.”
Overall, the index was down 1.5 points compared with March 2015.