- May 25, 2023
- Barbara Ballinger
Gallup has been polling Americans for 45 years on their take on the housing market and for the second year in a row a majority think now is a bad time to invest in a home. In fact, the percentage who remain optimistic has dropped to 21%, nine points less than the number a year ago.
Back in 1978 when the question initially was posed for Gallup’s poll, 53% thought it was a good time. Even more or 67% agreed in 1991 when it was asked again, though a recession then loomed as oil prices climbed after Iraq invaded Kuwait, the Federal Reserve attempted to tame inflation and debt from the 1980s accumulated, according to a Federal Reserve Bank of San Francisco report.
Why the Switch Occurred
Prices continued to rise in the early 2000s and lax underwriting made it easy for even poorly-qualified borrowers to get a loan. Eventually it all came crashing down in early 2007, causing many homeowners to default on home loans and become more pessimistic about homeownership. Yet, a majority or between 52% and 58% still thought it a good time to buy in the years from 2006 through 2008.
Optimism soon returned, along with lower home prices and interest rates. By 2009, optimism climbed back to 71%, then hovered in the high 60s and low 70s through 2017, a long stretch of good feelings about housing. But then the pandemic’s toll on the economy felled interest in homeownership, sending it down to 50%, a then-record low. Lower inventory, higher interest rates and bigger mortgage payments have now made housing less affordable, so pessimism has followed. Some believe they may never be able to buy a home, and only half of millennials have attained that milestone, far different than prior generations.
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