Number of Americans looking to buy homes hits five-year low: Fannie Mae
Sluggish income growth seen as driving demand for rentals
Homeownership may no longer be a central tenet of the American Dream. The number of Americans who would buy a home if they were to move hit a new five-year low, according to Fannie Mae.
A mere 60 percent of respondents in the mortgage giant’s March National Housing Survey said they would buy – the lowest level recorded in the five-year life of the survey and down from 68 percent a year ago. About 34 percent of respondents said they would prefer to rent, up from 28 percent a year ago.
The nationwide trend mirrors New York City’s widely publicized affordability problem, as Fannie Mae blamed the survey results on sluggish employment and income growth. The survey comes on the back of last week’s disappointing jobs report, which showed the economy adding a mere 126,000 jobs in March – the lowest number in 15 months.
“Consumers are being patient prior to entering the housing market,” Fannie Mae’s chief economist Doug Duncan said in a statement. “Our March survey results emphasize how critical attitudes about income growth are to consumers’ outlook on housing.”
Continually tight mortgage lending may also play a role in discouraging home purchases. Between February and March, the share of respondents who believe it would be difficult to get a mortgage rose from 43 percent to 46 percent.
But while Americans may be cooling on homeownership, they still appear to be confident in the health of the market. Nearly half the respondents said they believe home prices will rise over the coming 12 months, and a further 66 percent believe now is a good time to buy a home – if they can afford it.