Americans still hold onto the dream of homeownership — but rising prices are giving them pause.
Markets had another tumultuous week, with the Dow Jones Industrial Average
the S&P 500
and the Nasdaq Composite
recovering some ground at Friday’s close after a sea of red earlier in the week.
A recent poll from Gallup found that only 30% of Americans believe now is a good time to buy a house. It’s the lowest level on record since Gallup began surveying Americans on this question beginning in 1978, and it’s the first time less than 50% of people across the country thought it was a good time to buy.
In other words, even at the height of the foreclosure crisis amid the Great Recession at least 50% of Americans thought the time was right to purchase a home. But today, with home prices and mortgage rates rising, people are growing concerned about taking the plunge.
“Americans’ much more negative assessments of the current housing market may also keep them from looking to buy, which could lead to a slowdown in home sales” Gallup noted in the report. “If that happens, it would reduce the demand for houses and could lead to a decline in home values.”
Gallup’s survey found that attitudes toward buying a home grew more pessimistic in every region of the country and across all subgroups, including among both renters and homeowners. The largest drop-off occurred among suburban residents. Last year, 60% of these residents said it was a good time to buy, versus just 27% in the survey Gallup conducted in April.
Young adults were the most likely to have a negative outlook on buying a home. Only 25% of people between the ages of 18 and 34 believe the timing is right to become a homeowner.
Underpinning Americans’ growing pessimism toward the housing market is the expectation that home prices will continue to rise. Gallup reported that 70% of respondents said they expect the average price of homes in their area to increase over the next year, versus 18% who expect them to stay the same and 12% who believe they will drop.
Despite most people expecting homeownership to be a harder goal to achieve, Americans still tend to view it as the best long-term investment. Nearly half of the people Gallup polled (45%) said that real estate was the best long-term investment, while 24% said stocks and 15% said gold.