It’s no surprise that most Americans are dissatisfied with the state of the housing market, given that prices are rising and supply is at an all-time low.
Fannie Mae, a government-sponsored enterprise that purchases mortgages from lenders, issued research this week in which it found that 70 percent of Americans feel that now is a terrible time to buy a house. The information comes from a study of 1,006 persons in charge of making financial choices for their homes, which was carried out in January.
Only 25 percent of those who answered the survey indicated now is a good time to purchase a house, which is a record low.
Within the same period the previous year, more than half of those polled expressed optimism about the housing market, with 52 percent believing it was an excellent time to invest in real estate.
Those who believe it is a terrible time to purchase a property, on the other hand, had increased from 37 percent a year ago when the country was still recovering from the flu to 70 percent now.
There are many reasons to be skeptical about making a large real estate acquisition at this time. Prices are rising due to the pandemic-induced demand surge, which is supported by historically low loan rates.
Although low-interest rates make it inexpensive to borrow money (at least for the time being), the massive increase in demand has resulted in a scarcity of available housing.
In addition, ongoing supply chain concerns are generating shortages of construction supplies. The market is becoming even more competitive than normal due to an increase in real estate speculators crowding out regular purchasers.
According to real estate business Redfin, the median house price in the United States reached an all-time high of $365,000 last month, marking the highest price in the country’s history. At the same time, the number of active listings fell to an all-time low of 461,000, marking a new record low. This is a 28 percent decrease in the number of residences available in January 2021.
Additionally, a significant number of Americans do not anticipate having an easier time in the marketplace very soon: According to the Fannie Mae study, 43 percent of respondents believe that house prices will grow in the next year.
Rates on mortgages are also projected to rise, making borrowing more costly for consumers.
Daryl Fairweather, Redfin’s senior economist, said in a recent statement that “buyers are coming into the market to claim a house before mortgage rates climb higher.” “New listings have slowed to a trickle,” Fairweather said.
“The market is getting more difficult for first-time homeowners, who will have to compete against more experienced purchasers who are ready to go to any length to win their deals,” says the author.
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Young Americans Are Struggling To Purchase HOMES
The results of Fannie Mae were even more dramatic when it came to millennials and Generation Zers. Among those between 18 and 34, 83 percent felt now was a terrible time to purchase a home. Only 15 percent of those polled said now was a good time to purchase.
The statistics support this assertion: starter houses are in particularly low supply for younger buyers, and saving for a down payment is taking far longer than it used to do.
In a news release, Fannie Mae’s Doug Duncan, senior vice president, and chief economist said that younger consumers are more pessimistic about the economy than other age groups.
“Younger consumers more than other age groups expect home prices to rise even further, and they also reported a greater sense of macroeconomic pessimism.”
If you’re having trouble purchasing your first house, there are still choices available to you. According to a survey conducted by the real estate business RentCafe, Bloomington, Illinois, is the place where it is the most convenient to save for a down payment on a first house.
Thirteen additional cities in the Midwest were included on the list and a few bigger metropolitan regions such as Washington, D.C., and Baltimore, among others.