According to data released by Gallup on Friday, only 50 percent of Americans think it’s a good time to buy a home, the lowest point since Gallup began conducting the poll on an annual basis in 2003. Forty-nine percent of survey respondents stated they thought it was a bad time to buy a home.
“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,” Jeffrey M. Jones, the study author, wrote.
The previous low reached in this survey was a total of 52 percent of Americans who believed it was a good time to buy in 2006, during the throes of the housing bubble. Gallup first began conducting infrequent homebuyer sentiment surveys in 1978, but later launched its annual Economy and Personal Finance poll in 2003.
In 2019, 61 percent of Americans thought it was a good time to buy a home, while 36 percent said it wasn’t a good time to purchase a home.
As real estate agents have had to transition to showing homes virtually, and home sales have generally decreased across the country, it’s no surprise that buyer sentiment has become more pessimistic.
Gallup’s poll reached record-high positive buyer sentiment levels in 2003, with 81 percent of survey respondents believing it was a good time to buy a home — just as home prices were rapidly rising in the lead up to the housing bubble.
The downshift in homebuyer sentiment was more pronounced among homeowners than renters, whose optimism about whether or not now is a good time to buy only dropped by four percentage point from 48 percent who thought it was a good time to buy in 2019 to 44 percent this year. However, Jones noted in the study that the less significant drop in confidence this year is likely a result of renter optimism dropping more sharply between 2018 and 2019 when there was a shift from 59 percent of renters in 2018 who thought it was a good time to buy, to the 48 percent in 2019 who thought it was a good time to buy.
The number of Americans expecting home prices to rise in the next year also saw a sharp decline from 2019: 40 percent of Americans think the average price of homes in their area will increase over the next year, down from 62 percent in 2019.
Not only do fewer Americans believe home prices will increase than in 2019, but more Americans today anticipate that home prices will actually decrease in their neighborhood over the next year. Twenty-five percent of survey respondents said they expect home prices to decrease in the next year, compared to only 9 percent who responded the same in 2019.
Regionally, attitudes about home prices have shifted the greatest in the South, with only 39 percent responding that they believe home prices will increase in the next year, compared to 67 percent in 2019.
“March sales data showed an expected drop in the number of home sales, but home values were holding steady,” Jones wrote. “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.”