If you’re considering buying a home, now might be a good time, but your window of opportunity could be rapidly closing. According to a new Gallup poll, the number of Americans who expect both home prices and mortgage rates to rise in the near future has increased sharply—and with home prices as with many consumer trends, expectations can be self-fulfilling. When homebuyers expect prices to rise, they are more willing to pay higher prices…and when they expect mortgage rates to rise, they may feel time pressure to snap up homes for sale more quickly. A full 64% of Americans—more than any time since the housing bubble first emerged in the mid-2000s—expect prices to rise in their local areas in the near future.
The Gallup study shows that the expectations of most Americans largely match the realities of current housing market trends. Whether you’re planning to buy a home…or sell a home…or you are banking on your home appreciating in value, the study has major implications.
A renewed sense of urgency—and optimism. The 64% of poll respondents who expect prices to rose represents an increase of nine full percentage points over just two years ago. Two out of three respondents think it’s a good time to buy.
Expectations vary by region and income. In the pricey West, the highest percentage of respondents—79%—predict a spike in home prices. That’s an increase of 15 percentage points compared with 2016. The East and the Midwest also experienced double-digit percentage point increases in optimism, rising to 58% from 48% in the East and to 56% from 45% in the Midwest. In the South, 64% expressed optimism, up from 61%.
A seller’s market emerges. High demand, limited supply and the wide expectation that interest rates will rise have compelled many experts to urge prospective homebuyers to pull the trigger now, according to the study—and if they do, it will only feed what has rapidly become a seller’s market. The Gallup poll reinforces that perception. It shows that 45% of non-homeowners plan to buy in the next five years, but just 22% of current homeowners plan to sell. And that seems like a formula for the same kind of market—one that sellers will love.