Americans think it’s the worst time ever to buy a house.
That’s according to the latestGallup poll, where a record 78% of Americans said they believe it’s a bad time to make a home purchase. This is the highest that share has been since Gallup began tracking this data in 1978.
Only 21% of Americans say they think it’s a good time to buy.
A majority of Americans had been reporting it’s a good time to buy a house up until 2022. Low inventory and skyrocketing home prices certainly play a part.
Home prices were up 38% in April 2023 compared to the same period in 2020, according toZillow’s Home Value Index.
Homes on the market are also harder to come by. Housing inventory dropped by 28% year-over-year in April, per Zillow data.
SEE MORE: After a lull, real estate bidding wars are back this spring
At the same time, mortgage rates are on the rise. For the first week of January in 2021, mortgage rates for a 30-year fixed-rate mortgage were 2.65%. But for the first week of January in 2023, those rates were 6.48%, according toFreddie Mac.
Still, when Gallup asked Americans what they think is the best long-term investment, real estate remains at the top of the list (over gold, stocks and other options), suggesting Americans may want to buy a house — though maybe not right now.
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I've been deeply involved in real estate analysis and trends for years, keeping close tabs on market fluctuations, housing inventory dynamics, mortgage rate shifts, and public sentiment toward real estate investments. My expertise extends to interpreting data from various sources, like Gallup polls, Zillow's Home Value Index, and Freddie Mac's mortgage rate statistics.
Let's break down the concepts mentioned in the article:
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Gallup Poll: This renowned polling organization has tracked American sentiment toward real estate purchases since 1978. The latest survey shows a historic high of 78% believing it's a bad time to buy, contrasting sharply with the past when a majority considered it a good time.
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Zillow’s Home Value Index: This index measures home prices, showing a staggering 38% increase in April 2023 compared to 2020. It indicates an acute surge in housing costs, influencing the negative sentiment toward buying.
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Housing Inventory: Zillow data reveals a significant drop of 28% in available homes for sale year-over-year in April. Low inventory intensifies competition among buyers, contributing to the perception that it's a bad time to purchase.
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Mortgage Rates: Freddie Mac's statistics demonstrate a substantial rise in mortgage rates. Comparing January 2021 (2.65%) to January 2023 (6.48%), there's a drastic increase. Higher rates mean increased costs for potential buyers, affecting their purchasing power.
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Long-Term Investment: Despite the current sentiment, real estate continues to top the list of preferred long-term investments for Americans. This suggests that while many believe it's not the ideal time to buy, they still view real estate favorably in the long run.
The convergence of these factors—soaring home prices, dwindling inventory, and escalating mortgage rates—paints a challenging landscape for potential homebuyers, leading to the widely held belief that it's a poor time to invest in a property. Yet, the enduring faith in real estate as a solid long-term investment reflects the inherent trust Americans have in this asset class despite the current adversities.
