Mortgage professionals who are uncertain about the housing market are not alone. Practically everyone else is dubious, too.
Uncertainty among both buyers and sellers is at a three-year high, with three out of five unable to tell whether it’s a good time to buy or not, according to the latest Insights Report from Bank of America.
At the same time, though, just over half the 2,000 people polled are optimistic, saying the market is better now than it was a year ago and is heading in the right direction. Three out of four expect both house prices and mortgage rates to fall, up from just under two-thirds in 2023.
As a result, many are holding out for the market to continue to improve, notes Matt Vernon, head of consumer lending at the Charlotte-based institution. “The majority of buyers feel the market is headed in the right direction, but many are still planning to wait for more favorable conditions before they decide to take action,” Vernon said.
Along with rates and prices, another factor holding people back from buying is a deep-seated concern about local weather conditions, the survey found. Almost two-thirds of current owners and would-be buyers are worried about severe weather and natural disasters when it comes to home ownership.
Nearly three out of four feel it is important to buy in places where the risk of extreme weather events is low. So much so that more than a third have changed the preferred location where they want to buy a house. At the same time, two-thirds of the current owners have taken steps to reduce the possibility of major damage because of a flood, tornado, hurricane, wildfire, and the like.
The research, which was evenly divided between people who already own a house and rents who aspire to do so, also found that despite financial hurdles, the dream of homeownership remains a powerful motivator for younger people. Three out of every four current GenZ and Millennial owners counted buying a house as a “milestone achievement.”
“Even with the challenges they face, younger generations still understand the long-term value owning a home offers them,” commented Vernon. And the research shows that despite the hurdles, they are doing whatever it takes to reach their goals.
For example, three out of ten GenZ owners reported taking a second job to make their down payments. That compares to 28% in 2024 and 24% in 2023. Also, one in five said they bought their places together with a sibling, up from one in five in ‘24 and just 4% in ‘23.
And, as for renters, a third said they’d consider living with family or friends while waiting to buy, and one in five said they planned to use a loan from a family member to pay their up-front borrowing costs.
