Who Is Optimistic About Buying a Home? Not Younger Americans
Although builders are making smaller and potentially more affordable houses, a new poll says Gen Z and Millennials still feel shut out of the market.
Although builders are making smaller and potentially more affordable houses, a new poll says Gen Z and Millennials still feel shut out of the market.
Attitudes drive markets. Every month the Consumer Confidence Index tells us if people are optimistic about the market, driving up spending, or if we’re feeling grim about the state of inflation, labor, and business conditions and deciding to keep our money in our pockets. But what about our attitudes toward the housing market? A recent poll by the Harris Poll Thought Leadership Practice surveyed renters and homeowners and found the American attitude toward owning a home is dismal.
As reported by The Guardian, the poll surveyed Americans across generations—from Gen Z to Boomers—on a variety of questions related to housing costs, plans for future home purchases, expectations for the future, and the relevancy of location and lifestyle to their home-buying decisions. Overwhelmingly, renters reported increased rent and utility costs, and 75 percent of all respondents said they anticipate rent increases in the future. The majority of renter respondents said that they are currently paying more monthly in rent than they might with a mortgage, and 51 percent of renters attributed not having enough savings for a down payment as a reason why they haven’t purchased a home.
Though today’s high mortgage rates are also inhibiting home-buying, 78 percent of respondents said that the quality of available housing doesn’t match the price. This month The Washington Post reported on the country’s "shrinking" home sizes, writing that many home builders are turning toward smaller single-family and townhouse floor plans to cater to Millennials and Gen Z buyers seeking more affordable homes.
"In earnings calls, some of the country’s largest publicly traded home builders have said they are rethinking their plans so they can prioritize smaller, more affordable housing. D.R. Horton, the country’s largest home builder, sold more than 82,000 homes last year, most of them under $400,000 and to first-time buyers. Its lineup now starts at about 900 square feet," reports The Post.
Although smaller floor plans could yield greater affordability, The Post continues, new construction is still often costlier than purchasing older homes and isn’t keeping pace with demand. And though inflation continues to fall and interest rates may recede in the near future, the Harris survey shows a need for greater interventions that could allow first-time home buyers to save for down payments (without moving back in with their parents).
Related reading:
Would Blocking Private Equity From Buying Homes Really Fix the Housing Shortage?
American Homes Are Getting Smaller While Families Are Getting Bigger
Top photo: George Rose/Getty Images
