Only 21% of Americans say it is a good time to buy a house, the lowest percentage ever in Gallup’s polling sample.
Prior to 2022, for example, 50% or more respondents unfailingly thought it was a good time to make a home purchase, and you can find the specifics of the poll here….
The latest results are from Gallup’s annual Economy and Personal Finance poll, conducted over 3 weeks in April. Unbelievably, 78% percent of those surveyed say it is a bad time to buy a house right now.
To add some context, Gallup first asked Americans about their thoughts on the housing market in 1978, when 53% thought it was a good time to buy.
Per Jeffrey Jones’ report, “thirteen years later, when the question was asked again, 67% held that view. The record high of 81% was recorded in 2003, at a time of growing homeownership rates and housing prices.”
No doubt the respondents are sure of their positions, but does the data really bear that out? And what does the future hold?
The Current Situation – Two Viewpoints
Per Jones, “in the past two years, as housing prices have soared and the Federal Reserve has raised interest rates to try to tame inflation, houses have become less affordable for many Americans, and views of the housing market have tumbled.”
However, another housing survey, this one from the industry specific MBS Highway, showed in April another solid increase in buying activity as the spring selling/buying season kicked into high gear. This marks the 4th-straight month of improving sentiment for their report. You can find out more on that here…
68% of respondents characterized their market as ‘active’ and 33% of respondents indicated that they were now seeing price increases.
Media Bias Might Be To Blame
The latest Existing Home Sales report showed that the median home price declined on an annual basis for the first time in almost 11 years. That seems like a big headline, right?!
This is a classic case of the media trying to gain and keep viewership with shock headlines.
In many ways, our mainstream media is not truly interested in digging deeper for the facts and truth. You can find out more on that here…
First of all, the decline was only 0.2% – and it was for the median home price, which is NOT the same as appreciation.
FHFA’s latest appreciation report showed that home prices rose 5.3% year over year. And according to Case-Shiller, they rose 3.8% year over year.
These are the two best ways to measure home price appreciation.
The Real Inside Scoop
Although no one can deny that higher mortgage rates are keeping would-be buyers on the sideline, the story that no one is talking about is the lack of housing supply. You can find out more on that here…
More importantly, let’s take a closer look at active listings in the US:
You might remember from your Econ 101 class that supply and demand is what sets prices. Smaller supply means that a higher price is to be paid…so I do believe that home prices will not be going down any time soon!
All things considered, the opportunity in this market appears to be very favorable. If you are trying to wait to time the market, that home you are waiting for will just be more expensive down the road.
And if you make that purchase now and interest rates fall (as many think will happen), you can easily refinance into a lower rate!
Per Jones, “it is likely that Americans’ pessimism about homebuying reflects the high prices and high interest rates that are conspiring to make mortgage payments less affordable. These attitudes may keep many prospective homebuyers out of the market.”
If that’s the case, that means there is a window of opportunity for buyers ready to act today.
Do reach out to me to find out more, as it would be my pleasure to help you finance that investment property or the home of your dreams.