Renters might dream of one day owning a place and never writing another check to a landlord. But with home prices soaring and not so many properties to choose from, an increasing number of renters believe that day might be far away.
About 52% of those leasing the roof over their heads said it was a good time to buy, according to a quarterly National Association of Realtors® survey of more than 2,700 households. The survey was for the second quarter of the year.
But while a little more than half might not sound so bad, it’s down sharply from 62% of renters who said it was the right time to purchase a home at the same time last year and the 56% who said so in the past quarter.
“We are seeing this widening between renters and those who own properties,” says Jessica Lautz, NAR’s managing director of survey research. “The rise of home prices in many communities is making it more difficult for them to imagine themselves being able to purchase a home.”
To be clear, the majority of folks, 70%, think it’s a good time to buy a home for those making the local median income, according to the report. And those over the age of 55, making more than $50,000, and living anywhere but in the nation’s cities or priciest region—the West—were by far the most optimistic.
Who’s losing faith in the American dream?
Renters aren’t the only group slowly losing faith in the American dream. Millennials, who simply make less than the older generations, were the most likely to say it was a bad time to buy, at about 41%.
About 34% of those aged 35 to 44 said the time wasn’t right, while just 30% of those aged 45 to 54 and 23% of those aged 55 to 64 said the same. Meanwhile, only 20% of respondents aged 65 and older said it wasn’t the right time to become a homeowner.
“They’re seeing the affordability of homes slip out of reach,” Lautz says.
City dwellers also weren’t particularly optimistic, probably because home prices in urban centers are often much higher than elsewhere in the country. And despite the higher price tags, city homes tend to be a lot smaller than what buyers can get in the suburbs.
About 39% of urbanites weren’t too optimistic about it being an opportune time to purchase a home compared with 27% of suburbanites and 24% of those living in rural parts of the country.
Who thinks it’s a good time to buy a home?
Not surprisingly, those living in cheaper parts of the country—or with more benjamins in their bank accounts—were most likely to say it’s a good time to buy, according to the survey.
More than three-quarters of current homeowners, those aged 55 and older, those making more than $50,000 a year, and those living in the Northeast, South, and Midwest were particularly optimistic.
Those who made more money (and could therefore afford more homes on the market) were the most optimistic. About 78% of those raking in more than $100,000 were positive compared with 63% of those bringing in under $50,000.
About 74% of survey participants living in the Northeast and the Midwest were upbeat about buying, compared with 72% in the South and 62% in the West.
Prices are the highest in the West, which is home to uber-expensive markets including San Francisco, Silicon Valley, Seattle, and Denver, hurting many would-be buyers.
Buying might be tough, but selling should be a breeze
Rising prices have made it harder to be a buyer in today’s market, but it’s great to be a seller.
About 71% of those surveyed said it was a good time to put a home on the market. That’s up from 61% in the second quarter of last year and 69% in the past quarter.
“Now they do finally have equity in their homes, which they may not have had a year ago,” says NAR’s Lautz. While they can sell their home easily, they might have a hard time finding a new one to purchase—like every other wannabe buyer out there.
“That’s a difficult prospect,” Lautz adds.