- 50% say it is a good time to buy a house; down from 61% last year
- Drop has been greater among homeowners than renters
- Sharp decline in percentage expecting local home values to increase
WASHINGTON, D.C. -- Americans divide evenly on whether it is now a good (50%) or a bad time (49%) to buy a house. The 50% saying it is a good time to purchase a home is the lowest Gallup has measured -- two percentage points below the prior low in 2006 amid the housing bubble.
The latest data are from Gallup's annual Economy and Personal Finance poll, conducted April 1-14. The greater pessimism about housing comes during the coronavirus pandemic, which has led to a record drop in Americans' economic confidence and increased worry about their own personal financial situation.
Americans have consistently been more likely to say it is a good than a bad time to buy a house. Their responses to this question likely take into account the health of the housing market but also their belief that real estate is a good investment.
In 2003, as home prices were rapidly increasing, a record high 81% thought it was a good time to buy a house. Three years later, when values peaked, opinions on home buying hit a then-low, and stayed low after the housing bubble burst and led to the Great Recession.
Once the recession ended, Americans' opinions brightened, with 74% in 2014 saying it was a good time to purchase a home. But as home prices continued to climb, surpassing 2007 peak levels, the percentage who thought it was a good time to buy a home began to fall, dropping to 61% last year before the steeper decline this year.
Optimism about the housing market has declined more in the past year among homeowners (down 16 percentage points) than renters (down four points). That is partly because renters' optimism already fell sharply a year ago, while there was no meaningful change among homeowners between 2018 and 2019.
Homeowners are typically more inclined than renters to believe it is a good time to buy a house, as they are now. The current 53% among homeowners is the group's low point; renters were more pessimistic about the housing market in 2008 (37%) than they are now.
Big Drop in Percentage of Americans Expecting Home Values to Rise
Forty percent of Americans believe that the average price of homes in their area will increase over the next year. This is down from 62% a year ago, which was among the higher readings in Gallup's trend dating back to 2005.
At the same time, more than twice as many Americans today (25%) as last year (9%) expect home prices to decrease in their local area. Thirty-three percent -- compared with 28% last year -- believe home prices will stay the same.
Americans were more pessimistic about home values between 2008 and 2011 than they are now. During those years, typically fewer than 30% thought home prices would increase.
U.S. adults were most bullish on the housing market in 2005, as the housing bubble was continuing to grow and 70% expected home values to rise.
Homeowners (down 22 points, to 38%) and renters (down 24 points, to 44%) show similar declines in the percentage expecting local home prices to increase.
On a regional basis, the declines are greater among Southerners than those residing in the East.
Each of the past two years, Midwestern residents have been least likely among regional subgroups to expect home values to rise.
As with other economic attitudes, Americans' opinions about the housing market have shifted dramatically as the U.S. economy has abruptly slowed down in attempts to stop the spread of the coronavirus. March sales data showed an expected drop in the number of home sales, but home values were holding steady. Still, many economists believe the situation will get worse in the coming months, given the high rates of unemployment and the likelihood the U.S. is in a recession. The uncertain economic situation will also likely cause many Americans to be cautious about buying or selling a home. Also, many current homeowners may struggle to keep their homes due to a loss of employment and income.
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