That’s not entirely surprising, given the staggering jumps in home prices and mortgage rates, but Americans have never been more down-to-earth buying a home.
Only 30% of adults surveyed by Gallup said now is a good time to buy a home, down 23 percentage points from last year. This is the first time the share has fallen below 50% since the question was first asked in 1978. (Results are from Gallup’s annual Poll of Economics and Personal Finance, conducted April 1-19.)
Home prices are up 34% since the start of the pandemic, according to the S&P CoreLogic Case-Shiller National Home Price Index. The record price increase was driven by mortgage rates, which hit more than a dozen record lows in the first year of the pandemic. However, rates have risen by more than two full percentage points in just the past few months.
home affordability Almost the worst ever. Because of rising prices and interest rates, Mortgage Payment On average, a home is now nearly $2,000 more than it was before the pandemic began.
The supply of homes for sale is still historically low, and even the usually crowded spring market has done little to boost stocks. Demand, especially from millennials, is strong, but buyers are holding back because of costs. Home sales have fallen for five consecutive months.
“All major subgroups of Americans are significantly less positive about the housing market now than they were a year ago,” says the Gallup report. Those who were more positive about the market last year looked sadder, with the largest declines among Midwesterners, suburban residents and higher-income Americans.
By age, a quarter of 18-34-year-olds say now is a good time to buy, down from 42% a year ago. For those aged 35-54, 28% say the market is favorable, down from 52% a year ago. Seniors are somewhat more positive, with 35% saying now is a good time to buy, down from 61% in 2021.
Activity in home sales remains strong at the higher end of the housing market, where there is more supply.
Despite rising mortgage rates, most people still believe that home prices will go up even more. Analysts disagree but most believe that the current double-digit annual gains will shrink to around 4% to 6%. Consumers have always been optimistic about home prices, except in the aftermath of the Great Recession and the mortgage crash between 2008 and 2012.
While Americans may be pessimistic about the current state of home buying, they now more than ever believe that real estate is the best long-term investment. About 45% choose real estate, 24% choose stocks, and 15% say gold. Real estate used to track gold when Gallup first asked this question in 2011, but since 2014 it has been the winner.