Record Low in U.S. Say It Is a Good Time to Buy a House

WASHINGTON, D.C. -- Thirty percent of U.S. adults say it is a good time to buy a house, down 23 percentage points from a year ago and the first time the figure has been below 50%. Gallup has asked the question since 1978, including annual updates since 2003.

The results are from Gallup's annual Economy and Personal Finance poll, conducted April 1-19. The survey was conducted as the median sale prices of U.S. homes reached a record $428,000, and as mortgage interest rates have climbed to their highest levels in over a decade.

Until now, at least half of Americans had consistently said it was a good time to buy a house. The percentage holding that view has varied, often in response to housing market conditions.

In the early 2000s, as U.S. homeownership reached an all-time high, a record 81% of Americans said it was a good time to buy a house. As housing prices rose sharply in the mid-2000s, creating a housing "bubble" and leading to an eventual market crash, positive evaluations of the housing market fell to the low 50s.

Later, as the economy emerged from the Great Recession, mortgage rates were low, and housing values recovered, the percentage saying it was a good time to buy a house improved, peaking at 74% in 2014. But that confidence waned in recent years -- dipping to 50% in 2020 and 53% a year ago before cratering this year -- as housing prices continued to rise amid limited supply and high demand.

All major subgroups of Americans are significantly less positive about the housing market now than they were a year ago, with the percentage saying it is a good time to buy a house dropping at least 17 points in each of these groups. Certain subgroups who were more positive about the market in 2021 have shown slightly larger declines, including Midwest residents, suburban residents, upper-income Americans and homeowners.

Twenty-five percent of young adults, those aged 18 to 34, say it is a good time to buy a house, down from 42% a year ago. Among middle-aged adults, those 35 to 54, 28% believe the housing market is favorable compared with 52% last year. Older adults are somewhat more likely to say it is a good time to buy a house, with 35% holding this view -- though that is down from 61% in 2021.

Americans Expect Housing Prices to Continue to Increase

Most Americans believe that housing prices will only get higher, with 70% predicting that average local housing prices will increase over the next year. Eighteen percent think prices will stay the same, while 12% think they will decrease.

These attitudes are similar to what they were a year ago, when a record 71% predicted higher home prices in the area where they live. In 2005, seven in 10 Americans also thought home prices were going to increase. Majorities of Americans have expected housing prices to rise since 2013, with the exception of 2020, early in the coronavirus pandemic.

Between 2008 and 2012, Americans were most likely to say home prices would decline or stay the same rather than increase.

Americans living in the West (76%) and South (72%) are somewhat more likely than those living in the Midwest (65%) and East (63%) to expect housing prices to rise. Western residents typically have been more inclined than those in other regions to predict higher prices, and Midwestern residents less so.

New High Say Real Estate Is Best Long-Term Investment

As they have each year since 2014, more Americans choose real estate (45%) as the best long-term investment than pick stocks (24%), gold (15%), savings accounts (9%) or bonds (4%).

Gallup first asked Americans to pick among these five investment options in 2011. Real estate trailed gold in 2011 and 2012, and it essentially tied gold and stocks in 2013.

Since 2014, no less than 30% have chosen real estate as the best long-term investment, with the percentage exceeding 40% for the first time last year.

Real estate is thought to be the best long-term investment option among all major demographic groups, with the exception of lower-income Americans, who are divided about evenly between real estate, stocks and gold.

Bottom Line

The combination of record-high home prices, rising mortgage interest rates and a limited supply of housing is likely persuading Americans, for the first time in Gallup's trend, that it is a bad time to buy a house. For now, Americans continue to expect home prices to rise, even though higher interest rates mean prospective homebuyers will have to stretch themselves to make higher mortgage payments or settle for a less expensive house.

Americans' much more negative assessments of the current housing market may also keep them from looking to buy, which could lead to a slowdown in home sales. If that happens, it would reduce the demand for houses and could lead to a decline in home values.

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