A new report by NerdWallet reveals that 67% of Americans believe a housing market crash is imminent within the next three years, despite unemployment remaining low and house prices rising at a slower pace. The annual home buyer report surveyed over 2,000 adults in the US in December.
Although home prices have begun to fall in some cities, as the report reads, this does not necessarily indicate a crash. A recent report by Redfin found that the median price of a house sold in the US was up 0.9% from a year ago, at $350,250. Prices of homes sold fell on a year-over-year basis in 18 of the 50 most populous metro areas in the US.
However, these declines also came after double-digit percentage increases in house prices during the pandemic. 83% of respondents said buying a home “is a priority.” 11% of respondents said they plan to buy a house in the next 12 months, and planned to spend roughly $270,000.
The survey also identified factors that are holding buyers back. 32% of survey respondents said they feel worse about their ability to buy in 2023 versus last year, up from 25% a year ago. The biggest reasons given were because of a worsening economy, due to higher mortgage rates, and because of high home prices.
The gloomy economic outlook, from layoffs in the tech and financial sectors to widespread conversations about a recession, is preventing some people from buying homes. Despite the unemployment rate for December being 3.5%, and notable job gains in leisure and hospitality, health care, construction, and social assistance, the Bureau of Labor Statistics reported.
According to NerdWallet, 26% of those who had been unsuccessful in purchasing a home in 2022 cancelled or postponed their plans because they couldn’t afford it anymore. The survey highlights that the housing market may be slowing down, but home prices remain high, and many Americans are expecting a crash in the near future.
Although home prices have begun to fall in some cities, as the survey report suggest, this does not necessarily indicate a crash. San Francisco led the way in home-sale price declines, with prices down 10.1% from a year earlier. In San Jose, prices fell by 6.7%. Austin, Texas saw home-sale prices drop by 5.5%, and Detroit by 4.3%.
But, these declines also came after double-digit percentage increases in house prices during the pandemic. 83% of the survey respondents said that buying a home “is a priority.” 11% said they plan to buy a house in the next 12 months, and planned to spend roughly $270,000.
The survey also identified factors that are holding buyers back. 32% of the respondents said that they feel worse about their ability to buy in 2023 versus last year, up from 25% a year ago. The biggest reasons given were because of a worsening economy, due to higher mortgage rates, and because of high home prices.
The gloomy economic outlook, from layoffs in the tech and financial sectors to widespread conversations about a recession, is preventing some people from buying homes. Despite the unemployment rate for December being 3.5%, and notable job gains in leisure and hospitality, health care, construction, and social assistance, the Bureau of Labor Statistics said.
