Most Americans say it's a bad time to buy a house
Only 30% of U.S. adults say it is a good time to buy a house, according to a new poll by Gallop.
This is the first time the figure dipped below 50% since 1978 when the company began conducting its annual poll. The number is down 23 percentage points from a year ago.
Gallup's annual Economy and Personal Finance poll, conducted April 1-19, comes at a time when the median sales price of homes sold in the U.S. reached a record $428,000 in the first quarter of this year, the annual inflation rate accelerated to 8.5% in March and 30-year fixed mortgages climbed above 5%.
“People’s overall assessments of the economy is pretty negative now,” says Jeff Jones, an editor at Gallop. “Maybe more people are answering just in terms of current housing market conditions.”
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The poll reflects the frustration of potential homebuyers with a housing market marked during the past two years by low supply and high demand, increasing prices, and bidding wars.
Surprisingly, from 2006 to 2008, during the peak of the housing bubble with mortgage rates above 6%, the number of Americans saying it was a good time to buy a home stood in the low 50s, more than 20 percentage points compared to today. The only time it touched 50% was in April 2020, amid pandemic lockdowns.
In 1978, when mortgage rates hovered above 9.5% and inflation stood at 7.5%, 53% of Americans thought it was a good time to buy a house.
Since 2014, more Americans choose real estate (45%) as the best long-term investment than pick stocks (24%), gold (15%), savings accounts (9%), or bonds (4%). In 2011, for instance, gold was the top pick for 34% of Americans while real estate was favored by 19% of the people.
Americans believe housing prices will only get higher, with 70% predicting that average local housing prices will increase over the next year, according to the recent poll.
“People feel it's too expensive and are being priced out of the market now,” says Jones. “Prices are already at record highs, and then if it's going even higher, and you throw in the interest rates in the path of that they feel they can’t afford as much of a house. My guess is they are probably thinking short-term right now.”
If people continue to lose confidence in the current housing market, it could lead to a slowdown in home sales, says Jones.
“If people start dropping out of the market,” he says. “It would reduce the demand for houses and could lead to a decline in home values.”
Swapna Venugopal Ramaswamy is a housing and economy correspondent for USA TODAY. You can follow her on Twitter @SwapnaVenugopal and sign up for our Daily Money newsletter here
This article originally appeared on USA TODAY: Bad time to buy a house? Most Americans think so.
