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Americans’ desire for homeownership unbowed by high interest rates and soaring prices
The covid-19 pandemic sent house prices on a record upwards spiral but research shows the desire for a new home has not been perturbed.
The most visible sign of rising interest rates, as has been the case since the middle of 2022, is a slow down in the number of homes purchased. Indeed, recently published data from the Commerce Department showed a 5.6% drop in the rate of new home sales compared to a year ago.
New homes are not the only ones affected. According to the National Association of Realtors the supply of previously owned homes is down 50% compared to before the pandemic. House prices leapt to record highs of $479,500 in 2022, a 46% increase from the start of the pandemic. Very few people’s salary have increased that much in the same period.
Buying a house has become exorbitantly expensive, especially for those people at the bottom of the housing ladder. But that doesn’t mean the appetite for owning a new home has slumped.
A report from Architectural Digest suggests that people are broadly positive about the chances of buying a home next year. 41% of Americans aim to purchase a property with the most popular places being Los Angeles and New York, two of the most expensive places in the country.
The report in more detail
Architectural Digest surveyed over a thousand Americans to find out their expectations of the 2024 real estate market. Here are some of the findings:
- Two-fifths of Americans hope to buy a home in 2024.
- However, just over a quarter of those surveyed have only $199k or less to purchase a home in 2024. This is far below the nationwide median price.
- Unsurprisingly, 1 in 12 Americans weren’t confident at all about being able to afford their home in 2024.
- Only 1 in 10 Americans plan to buy an investment property in 2024.
“Based on our report, Americans are optimistic about the 2024 housing market, considering that 1 in 3 Americans are confident they can purchase a home in 2024,” said Ricardo Rodriguez, Data Journalist working on behalf of Architectural Digest. “The majority also plan to downsize, considering 49% of buyers are looking for a place under 2,000 sqft.”
Other findings revealed that LGBTQ+ Americans are less likely to be planning to buy a home compared to their heterosexual counterparts, one-third compared to four in ten respectively. A third of Americans are considering eschewing a home altogether and are considering an RV or camper van.
The report also asked which factors are most important when buying a house. Six-in-ten respondees reported the cost is the most important aspect, beating crime rates (56%) and neighborhood safety (53%).