Gallup Poll: Is The Bubble Over? Majority No Longer Believe in the Homebuyer American Dream

For the first time, the majority of Americans do not believe that buying a house is a wise decision.

The country has never been more pessimistic about homeownership, with only 30% of survey respondents to a recent Gallup poll saying that now was a good time to buy into the housing market.

That is down 23 points from a year ago and the lowest on record. Perhaps more significantly, it is the first time since the poll began in 1978 that most Americans agreed that it is a bad time to buy a house.

While there are many factors at play, three major themes appear to be driving a home affordability crisis that has left most of the nation increasingly bearish about their ability to participate in the American Dream.

Three Themes Driving The Home Affordability Crisis

Rising Interest Rates

As home prices began to creep up after the initial panic of the COVID-19 pandemic in 2020, interest rates set new lows seemingly every month.

These trends set off a wave of home buying. Low inventory and high demand forced prices higher, but falling mortgage rates kept affordability somewhat in check.

However, in the span of a few short months, interest rates have shot up more than 75%. Mortgage rates that were hovering around 3% at the beginning of the year spiked more than two percentage points to around 5.25% in just a few short months, driving up monthly mortgage payments by an astonishing 30%.



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What was initially considered transient inflation - the temporary aftershocks of the post-pandemic economic recovery - has settled into the highest year-over-year inflation rates in four decades. According to the latest release from the Bureau of Labor Statistics, consumer prices rose 8.5% from March 2021 to March 2022.

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