Despite skyrocketing home prices, a majority of Americans believe now is a good time to buy a home, according to a new survey from Gallup.
These days, 53% of Americans believe it is a good time to buy, Gallup reported Tuesday, citing the results of a survey of nearly 1,000 U.S. adults conducted in April. Last year, only 50% of people felt this way, marking a record low since Gallup began tracking Americans’ sentiment on the housing market in the 1970s. At the time, people were responding to the sudden slowdown in real-estate transactions as the economy shut down at the beginning of the coronavirus pandemic.
Demographic shifts and the pandemic-fueled move to remote working caused demand among home buyers to jump. As people rushed into the market and quickly scooped up properties, the inventory of homes for sale has dropped to a record low in recent months. To an extent, this supply gap is a reflection of years of under-building following the Great Recession.
53% of Americans believe now is a good time to buy a home, according to Gallup.
The situation has caused home prices to reach record highs across much of the country, and Americans have taken notice. Gallup’s survey found that 71% of Americans believe that home prices are going to increase over the next year in their local market. This is the highest reading since Gallup began tracking this data point, though it is not statistically different from 2005’s measure of 70%. A year ago, only 40% of people expected home prices to increase.
Expectations of rising home prices were essentially universal across the country, regardless of whether the survey respondents lived in a major city, suburb or rural area.
The quick increase in home prices is making Americans more pessimistic about housing than they’ve been in recent years. Historically, people’s feelings on the housing market have changed in response to market conditions. “Slim majorities also said it was a good time to buy a house in 1978, a time of high inflation and high mortgage interest rates, and in the mid-2000s housing bubble era,” Gallup noted. “Americans were most bullish on home buying in 2003, when home prices were rising sharply and 81% said it was a good time to buy a home.”
Other data has pointed to Americans’ wariness about the housing market currently. A record number of people have searched on Google to find out whether real estate is poised for another crash like the one the country experienced in the run-up to the last recession.
Nevertheless, Americans continue to prefer homeownership to other long-term investments. Gallup found that 41% of people believe real estate is the best long-term investment, up from 35% last year. Stocks and mutual funds came in second at 26%, followed by gold (18%). Only 3% of people thought bonds were the best investment tool.