Home Buyers Now Think It’s A Bad Time To Buy A House
77% of those surveyed say that they don’t think this is a good time to buy a house.
According to the latest National Housing Survey by Fannie Mae, confidence in this being a good time to buy a home has hit an all-time low.
Millions may have been driven to buy over the past year as landlords were too fearful to ink new leases or were locked up with occupants they couldn’t evict. Though with the national eviction ban overturned, leasing could easily surpass buying activity soon.
Consumer Sentiment Drops
In addition to the general consumer sentiment dropping in early 2021, Fannie Mae’s latest data shows that inflation is also impacting movers’ views of the housing market.
Of the respondents to the Fannie Mae survey, only 35% said they thought it was a good time to buy a home. Which may have heavily relied on low interest rates.
56% said it was a bad time to buy a home. 21% said it was not a good time to buy a home, falling sharply from March 2021.
These feelings also certainly showed up in pending homes sales data, which showed a dip beginning in April 2021, and could show up in softer home sales during what should be peak home buying season this year.
The American Dream Is Alive, It’s Just Too Expensive Right Now
Hyperinflation has apparently begun to grind on consumers on all fronts. Groceries, gas, and taxes are all getting more expensive. Home prices have been growing at the fastest pace in 15 years.
Still, the vast majority of those surveyed still said if they were to move, they would like to buy a home. They believe in the benefits of homeownership; they are just being turned off by the wild prices.
The Interest Rate Factor
Low mortgage rates have certainly helped fuel the recent home buying spree.
However, Treasury Secretary Janet Yellen recently announced that she thinks higher interest rates would be good. If the Fed begins a rate hiking spree, that could make it even more unappealing for the average retail buyer. It would certainly make it far more difficult to afford and qualify for a mortgage on the average home.
For Real Estate Investors
For investors this makes a strong case for investing in rentals, including apartment buildings and neighborhoods of single-family rental homes.
Expect a significant number of potential tenants hitting the market over the rest of the year. Many may have strong cash positions from a year of stimulus and staying home. While the government is making a big push to pay rents in many different ways.
This should all support strong occupancy rates, rising rental rates, and give landlords the pick of plenty of solid tenants to choose from.
