Gallup poll: A record low in U.S. say it is a good time to buy a home
Only 30% of respondents think now is a good time to buy a home, and the feelings about the economy are playing a role.
The percentage of Americans who think that now is a good time to buy a home has hit a record low, according to a new Gallup poll.
The poll, conducted April 1-19, found that only 30% of respondents think now is a good time to be a buyer. It’s the first time that number has dropped below 50%, according to Jeffery Jones, a senior editor at Gallup.
“Every other measure we’ve taken since 1978 has been above 50%, so these results are pretty dramatic,” Jones said. This year’s response also marks a staggering 23% drop from last year, when more than half of those surveyed said they believed it was a good time to buy.
Part of the reason the percentage has never before dropped below 50% is because there’s a general sense that “it’s good to buy a house, regardless of what the conditions are,” Jones said. “So that to me was kind of shocking …. maybe the conditions are so bad that that normative kind of view is just being muted.”
The reason for this shift in public opinion is likely multifold, according to Melvin A. Vieira Jr., president of the Greater Boston Association of Realtors. Vieira said it is likely a product of the perfect storm that includes the pandemic-fueled craving for bigger living spaces.
“With the rise of interest rates, with prices going up with, with so few options out there as housing stock, it becomes a little disenchanting,” Vieira said. “And because there’s not a lot of options out there, it can really not make you feel good.”
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Right now prices are also outpacing wages in Greater Boston, creating an “overvalued market.” And while home sales in the state were down 9.7% in the first quarter according to Tim Warren, chief executive of the real estate analytics firm The Warren Group, prices were up 11% — an indication that low inventory, not lack of demand, may be to blame.
Buyers have faced daunting markets before, however. This new lack of optimism may have more to do with the public’s overall view of the economy than with the market conditions alone.
“People are just kind of pretty negative about the economy right now, and I think that might factor in as well,” Jones said. “Last year, for example, housing prices were high, and people thought they’re going to go up, but people weren’t as negative about the economy as they are today.”
That may explain why an overwhelming majority of those who responded to the survey — a total of 70% — said they expected home prices to increase over the next year. Whether or not this will be the case remains to be seen. Prospective buyers will eventually be priced out — soon rather than later if interest rates continue to rise — creating lower demand.
“If people act consistent with their beliefs that is not a good time to buy a house, you would expect to see a lot of people dropping out of the market,” Jones said.
Just when the market will become more “normal” is still up in the air.
“I don’t foresee it happening tomorrow,” Vieira said.
“Interest rates do play a part in it, and that will slow things down, but the problem is until we actually build more homes, and build more affordable homes for people to buy, prices won’t level off.”
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