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Just 21% of adults think now is a good time to buy a house, according to a new survey out today from Gallup.
It’s a record low. In fact, it’s only the second time in more than four decades that less than half of Americans have said it’s a good time to buy a house. (The first time was last year.)
And it’s true that it’s a tough time for a multitudes of people to buy. Mortgage rates and home prices are high, inventory is low and there just aren’t many affordable options out there, which translates to fewer people buying. That affects other industries, too.
For instance, when people buy a new home, they often buy things to go with it.
“Home furnishings, appliances and then, of course, technology, whether it’s new televisions or new security systems or surround sound,” said Natalie Kotlyar at the accounting and advisory firm BDO USA. She said when home buying slows down, “There really is a ripple effect.”
Today’s retail sales numbers showed people spent less on furniture, appliances, building materials and garden supplies in April than they did a year ago. Home Depot also reported today that sales dropped in the first quarter and said it’s not expecting the rest of the year to be great, either.
“The state of the real estate market is kind of flowing through to some of those major retail chains,” said Katie Thomas at the Kearney Consumer Institute. She said it’s important to remember, though, that this is coming after an unusually strong few years for companies like Home Depot that really benefited from all the home improvement projects people did during the height of the pandemic.
“Nothing’s falling off a cliff yet, you’re just seeing a little bit of a stabilization from the pandemic,” she said.
There are also other factors in the economy right now that are making people pull back, said Lydia Boussour, senior economist at EY Parthenon.
“That includes elevated inflation, the fact that credit has become more expensive and more difficult to access,” she said. “And at the same time, the labor market is turning less supportive.”
So it’s not just that fewer people are buying and selling homes. In fact, Kevin Erdmann at the Mercatus Center at George Mason University said it’s not all bad news in the housing market.
“The actual construction of new homes — the actual rate of completion of homes each month — really hasn’t declined at all,” he said.
Home builders are busy, and seemingly, they’re actually getting more confident with every passing month.
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