Americans’ view of the housing market has plummeted as interest rates continue to rise due to government-fueled inflation.
Gallup released new survey data showing that only 21% of Americans say now is a good time to buy a home, down 9 percentage points from the previous year. This year and last year during the Biden administration are the only times less than half of Americans said it was a good time to buy a home since Gallup started asking in 1978.
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Even during the housing market crash of 2008, the numbers didn’t fall nearly as low as they did in this latest study.
“Gallup first asked Americans about their perception of the housing market in 1978, when 53% thought it was a good time to buy a home,” the group said. “Thirteen years later, when the question was asked again, 67% agreed. The record high of 81% was recorded in 2003, at a time of rising home ownership and house prices.”
The change in perspective comes as the Federal Reserve raised interest rates nearly 10 times during the Biden administration, making borrowing money to buy a house much more expensive.
The problem is further complicated by the fact that millions of Americans currently have mortgages with interest rates below 3%, prompting many to decide that now is not the time to sell their homes and lose that lower rate.
“Over the past two years, as home prices have skyrocketed and the Federal Reserve has raised interest rates to curb inflation, homes have become less affordable for many Americans and housing market outlook has collapsed.” Gallup said.
The higher inflation rates are driven in large part by an increase in the money supply and federal debt spending amounting to several trillion dollars in recent years.
The federal government has also recently taken a decision controversial policies to punish homebuyers with good credit and help those with bad credit, similar to those enacted prior to the 2008 financial crisis, fueling fears first fueled by several bank collapses earlier this year.
All of these factors contributed to Americans’ banking anxiety reaching its lowest point since the 2008 financial crisis. Gallup released the survey data earlier this month, which showed that 19% are “very” concerned about the safety of their money in banks and another 29% are “moderately” concerned.
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The survey found that nearly half of Americans are concerned about the safety of their money in banks, a figure reminiscent of the 2008 financial crisis.
“The latest measurements are similar to those in 2008,” Gallup said. “In September of that year, shortly after the collapse of Lehman Brothers, the largest bankruptcy filing in US history, 45% of American adults said they were very or moderately concerned about the safety of their money. Several months later, in December, after Congress’s Troubled Assets Relief Program (TARP) bailed out other banks facing bankruptcy, Americans were slightly less concerned about the safety of their personal financial accounts, as 41% said they were very or to be moderately concerned.”
Syndicated with permission from the Center Square.
