There’s been a distinct uptick over the past year in the number of Americans who say now is a bad time to buy a home, independent research group Capital Economics states in a new report.
According to the report, nearly a quarter of surveyed Americans pointed to high home prices as the primary reason for their reluctance to buy.
It’s been 12 years since that many people said high home prices were the main deterrent to homeownership.
According to the Capital Economics report, the last time real home prices were this high – in the pre-crash days of August 2004 – only 13% of surveyed Americans said prices were a leading reason not to buy. Today, that number is 22%.
This sentiment appears to be elevated in relation to real home prices and mortgage affordability, according to the update. And while stricter mortgage lending standards may be preventing some who think they can afford a house from buying one, other factors, including lingering memories of the housing crash, may be at play.
“We suspect memories of the house price crash 10 years ago are also playing a role in the relatively fast build-up in concerns over high house prices,” the update stated.
“After all, only three years ago over 10% of homes were still underwater. An understanding that house prices can quickly lose value is making Americans more cautious about buying a home.”
But caution might be a good thing, serving as a necessary weight that could temper housing demand.
“The good news is that that caution should in itself prevent a dangerous boom in house prices from developing,” the update stated. “Based on past form, the rise in the share of households saying it is a bad time to buy a home suggests house price growth will slow to zero over the next 18 months.”