Consumers seem to be feeling more positive about the real estate market, according to the most recent Fannie Mae Home Purchase Sentiment Index® (HPSI), which increased 0.4 points in November to 75.0. This marks a continuation of the index's sharp upward trend over the past year.

A new record-high share of consumers indicated that they expect mortgage rates to decline over the next 12 months, while fewer respondents said they expect home prices to rise, according to this month's report. While only 23% believe it's a "good time to buy a home," on net that component continued its upward trend, and is now notably higher than last November's share of 14%. The share of respondents saying it's a "good time to sell" remained flat month over month but is also up from last year. Year over year, the HPSI is up 10.7 points.

According to Mark Palim, Fannie Mae senior vice president and chief economist, general consumer sentiment toward the housing market has been improving, thanks to increased optimism that mortgage rates will fall and improved perceptions of both homebuying and home-selling conditions.

Palim explains that a "sharply growing share" of consumers expect their personal financial situation to improve over the next year. At the same time, more consumers expect the escalation of home prices to slow down a bit, which will in turn, help ease affordability issues. With this in mind, it's likely that many who have put their home-buying plans on hold will begin their search in the new year.

Here are some additional insights from the HPSI:
 

• Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home increased from 20% to 23%, while the percentage who say it is a bad time to buy decreased from 80% to 77%.
• Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home remained unchanged at 64%, while the percentage who say it's a bad time to sell also remained unchanged at 35%.
• Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months decreased from 39% to 38%, while the percentage who say home prices will go down increased from 23% to 25%. The share who think home prices will stay the same decreased from 38% to 36%. 
• Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 39% to 45%, while the percentage who expect mortgage rates to go up increased from 22% to 25%. The share who think mortgage rates will stay the same decreased from 38% to 29%.