Homeownership Rates Not Likely to Increase Substantially in the Next Few Years
Nearly half of people who are currently renting their home don’t think they’ll be able to afford to buy one “for the foreseeable future.”
That’s according to the latest Gallup poll, which found that homeownership rates are not likely to increase substantially in the next few years.
Non-homeowners who expect to buy in the short-term
By the numbers:
According to Gallup, 62% of Americans say they own a home, while 34% say they rent. Homeownership is lower now than before the housing crash in the late 2000s, Gallup says.
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For people who don’t own a home, only 30% believe they’ll be able to buy one in the next five years. That’s compared to 23% who said maybe in the next 10 years and 45% of people who said not for the foreseeable future.
A for sale sign is displayed outside of a home for sale on August 16, 2024 in Los Angeles, California. (Photo by PATRICK T. FALLON/AFP via Getty Images)
That’s significantly lower than surveys conducted between 2013 and 2018, when no fewer than 41% of non-homeowners expected to buy a home in the next five years.
Why aren’t more people buying homes?
Big picture view:
Renters say the cost of homeownership, including a down payment, is the biggest reason why they won’t buy. Gallup found that 68% of renters say they do so because they cannot afford to buy a home or don’t have enough money for a down payment. That’s up from 45% in 2013. It’s not surprising: A recent report from Zillow found that starter homes cost $1 million in 233 U.S. cities. A separate report from Realtor.com found that South Carolina was the only state to get an “A” grade for housing affordability and supply.
Only 11% of renters say it is more convenient to rent, and only 1% say they rent because they are older and downsizing. According to Gallup, almost every other reason given for renting – housing market, bad credit, high property taxes or job considerations – has an economic component.
Americans aren’t confident in the housing market
Dig deeper:
Americans remain pessimistic about the housing market, with 72% saying it’s a bad time to buy a house. That’s slightly lower than in 2023 and 2024, but higher than polling from 1978-2021.
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Gallup found that 57% percent of U.S. adults expect local housing costs to increase over the next year, while 28% believe prices will stay the same and only 13% predict they will decrease. Last year, 68% expected price increases, just short of the record-high 71% measured in 2021.
In most years since Gallup first asked the question in 2005, majorities have believed local home prices would rise, except from 2008 to 2012 in the years after the housing bubble burst and in 2020 near the beginning of the COVID-19 pandemic.
RELATED: Starter homes cost $1 million in 233 US cities, Zillow analysis finds
Despite elevated interest rates, expensive mortgages and many being priced out of the market, Americans still rank real estate as being the best long-term investment.
What they’re saying:
“The challenge lies in making that investment option more attainable to a wider segment of the U.S. adult population,” Gallup says.
The Source: This report includes information from Gallup, Zillow and Realtor.com.
Conclusion
The latest Gallup poll has found that nearly half of renters do not think they will be able to afford to buy a home in the foreseeable future. This is due to various factors such as the high cost of homeownership, expensive mortgages, and lack of affordability. The poll also found that Americans are not confident in the housing market, with 72% saying it’s a bad time to buy a house. Despite this, Americans still rank real estate as being the best long-term investment. However, the challenge lies in making this investment option more attainable to a wider segment of the U.S. adult population.
Frequently Asked Questions
Q: What percentage of Americans own a home?
According to Gallup, 62% of Americans say they own a home, while 34% say they rent.
Q: Why don’t renters want to buy a home?
Renters say the cost of homeownership, including a down payment, is the biggest reason why they won’t buy. Gallup found that 68% of renters say they do so because they cannot afford to buy a home or don’t have enough money for a down payment.
Q: Are Americans confident in the housing market?
No, Americans remain pessimistic about the housing market, with 72% saying it’s a bad time to buy a house.
Q: What do Americans think about the future of housing costs?
Gallup found that 57% percent of U.S. adults expect local housing costs to increase over the next year, while 28% believe prices will stay the same and only 13% predict they will decrease.
