Downbeat on Homebuying

As the Federal Reserve raises interest rates to combat rising inflation, loans like mortgages become more expensive for borrowers, and as average home prices continue to climb, homebuying sentiment has taken a hit. 

A survey from Gallup revealed that a record low number of Americans say now is a good time to buy a house. Only 30% say it's a good time to buy a home, down 23 percentage points from a year ago. Meanwhile, 69% say it’s a bad time to buy. 

The survey was conducted in early April, as the median sales price of U.S. homes reached a record $428,000 and as mortgage rates climbed to their highest levels in over a decade. Until now, at least half of Americans had said it was a good time to buy a house. 

By age group, only 25% of young adults between the ages of 18 to 34 said it was a good time to buy a house, down from 42% a year ago. For middle-aged adults, those 35 to 54, 28% believe the housing market is favorable compared with 52% last year. Older respondents were somewhat more likely to say it is a good time to buy, with 35% holding that view, though that is down from 61% last year.

Most Americans believe that housing prices will only go higher, with 70% predicting that prices will increase over the next year. Eighteen percent think prices will stay the same, while 12% think they will fall.