Home Buyer and Consumer Optimism Grow in July

Pessimism fades this Summer

Borrower conditions are improving and recent data showed home buyers gained negotiating leverage.

Although affordability remains a hurdle while economic uncertainty and tariff pressures pervade daily life, home buyer confidence improved in July.

See what the prevailing home buyer and consumer sentiments are with the current economy and what’s causing concern.

How are home buyers feeling?

The general consensus among house hunters helps shape market competition.

More demand — especially when for-sale inventory is low — can create frenzied bidding wars and accelerate home price growth. Then, the pendulum could swing the other way. Worsening home buyer conditions may give borrowers a chance at a comparatively good deal on a property.

Through a consumer survey, Fannie Mae’s Home Purchase Sentiment Index (HPSI) evaluates the overall view and outlook of the housing market. The index launched in 2011 and runs on a scale of zero to 100. It reached a high of 93.8 in August 2019 and a low of 56.7 in October 2022.

In July, the HPSI grew to 71.8, up from 68.1 month-over-month and 71.5 year-over-year. Despite instability and uncertainty, improved job loss concerns and home price outlooks drove the index gain.

The table below shows the overall HPSI scores from the last 12 months:

The HPSI components

The overall index dissects into six components: Good time to buy, good time to sell, home price expectations, mortgage rate expectations, job loss concern, and household income.

Below is the breakdown of each measure for July 2025:

How are consumers feeling?

Additionally, two monthly reports — The Conference Board’s Consumer Confidence Index (CCI) and the University of Michigan’s Survey of Consumers — gives a broader view on people’s attitudes with employment, spending, and economic outlook.

The Conference Board’s Consumer Confidence Index

The CCI, with a baseline of 100, rose to a score of 97.2 in June from 95.2 in June.

The CCI comprises two sub indexes covering income, business and labor; one based on current circumstances and one on short-term, six-month outlooks.

The Present Situation Index declined to 131.5 from 133 in June, while the Expectations Index increased to 74.4 from 69.9. According to The Conference Board, the Expectations Index falling below 80 typically serves as a leading indicator for a recession.

“Consumer confidence has stabilized since May, rebounding from April’s plunge, but remains below last year’s heady levels,” said Stephanie Guichard, senior economist at The Conference Board.

“They were a tad more positive about current business conditions in July than in June. However, their appraisal of current job availability weakened for the seventh consecutive month, reaching its lowest level since March 2021. Notably, 18.9% of consumers indicated that jobs were hard to get in July, up from 14.5% in January.”

The CCI components

The overall CCI breaks down into five measurables: Current business conditions, current labor market, expected business conditions, expected labor market, and income prospects.

The table below shows the month-to-month shifts in consumer confidence levels for the five CCI components. Expected and prospective conditions are based on the next six months.

University of Michigan’s Survey of Consumers

The consumer sentiment index also has a baseline score of 100 and hit 61.7 in July. That grew from 60.7 in June but dropped from 66.4 in July 2024.

The index bifurcates into two sub categories: current economic conditions and expectations. The current index reached 68 in July, up from 64.8 month-over-month and from 62.7 year-over-year. The expectations index went to 57.7 from 58.1 and 68.8, respectively.

“Although recent trends show sentiment moving in a favorable direction, it remains broadly negative. Consumers are hardly optimistic about the trajectory of the economy, even as their worries have softened since April 2025,” said Joanne Hsu, director of surveys at U of M.

The survey components

The table below shows the monthly and annual changes to the University of Michigan’s consumer sentiment survey, plus its two components.

The bottom line for home buyers

Good or bad home buying conditions, experts will tell you that trying to time the market right rarely works. They also tend to advise that the best time to buy is when you find a property you can afford.

So get ahead of competition and do all the prep work before applying for a mortgage. If you need to beef up your financial profile, you can try to raise your credit score and qualify for down payment assistance programs.

If you’re ready to start your homeownership journey, reach out to a local loan officer today.