A record low number of Americans think now is a good time to buy a house, according to a new Gallup poll published Tuesday.
Just 21% of respondents say it's a good time to buy a house – the worst share in Gallup's survey history that dates back to 1978. Meanwhile, a stunning 78% of consumers think now is a bad time to buy a home.
"Fewer Americans now than ever before believe it is a good time to buy a house," the survey said. "The past two years are the only times Gallup has found less than half of Americans endorsing a home purchase in the prevailing housing market. These bleak homebuying assessments are fairly uniform across most subgroups of Americans."
The housing market entered a deep freeze last summer as the Federal Reserve began aggressively hiking interest rates in a bid to crush high inflation. Rising borrowing costs combined with high inflation proved to be a lethal combination, forcing many potential homebuyers out of the market.
HOUSING MARKET COULD TUMBLE INTO A ‘DEEP FREEZE’ IF US DEFAULTS ON ITS DEBT
Still, a confluence of data released last month shows that the housing market is slowly recovering from the downturn, although it has yet to return to pre-pandemic norms. Sales of existing homes resumed their downward spiral and are down 22% when compared with one year ago; homebuilder sentiment is rising, but remains depressed; and housing prices are back on the rise, snapping a seven-month streak of declines.
As housing prices have soared and become even less affordable for many Americans, their views of the housing market have sank.
WHAT IS THE DEBT CEILING, AND WHAT DOES IT MEAN FOR YOU?
"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," the survey said. "These attitudes may keep many prospective homebuyers out of the market."
Despite the overall gloom about the state of the housing market, Americans still regard real estate as the best long-term investment over stocks, gold and other options – even though some consumers are bracing for a decline in prices over the next year.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
As home prices have started to fall in many areas of the country, fewer Americans expect home values in their area to rise in the coming year. About 56% of respondents anticipate an uptick in home prices, compared to 25% who believe prices will stay the same. Less than one-quarter of respondents – 19% – think prices will decrease.
The survey was conducted between April 3-25, when the fixed rate on the popular 30-year mortgage rate for homes spiked to 6.39%.
