Survey Reveals Americans Holding on to Dream of Homeownership Despite High Lending Rates
Despite challenging times in the housing market, the American Dream of owning a home is still alive, according to a recent Realtor.com survey. A majority of Americans think the dream is still achievable, though for many prospective buyers, it hinges on an interest rate drop to less than 6%.
Though the sentiment is generally shared across generations, for Millennials and Gen Z, there may be a little more flexibility, with nearly half (47%) of Millennials and 37% of Gen Z respondents stating they'd still buy a home if rates went above 8%. Although rates are not anticipated to go below 6.5% according to Realtor.com's 2024 Housing Forecast, research shows that every half percent drop in the mortgage rate reduces the monthly payment for the typical home for sale by $120, a savings of $1,400 per year and $43,000 over the life of a 30-year mortgage.
Home Builders CEO Says Nation Heading Toward ‘Housing Renaissance’
National Association of Home Builders CEO Jim Tobin in a recent interview expects 2024 will be a turning point for the nation’s housing market. “We’re heading toward a housing renaissance," National Association of Home Builders CEO Jim Tobin told Yahoo Finance Live.
Tobin's comments came after this week mortgage rates posted their biggest drop since May last year. The average rate for a 30-year loan slid to 6.60% from a peak of nearly 8% in October. Sales of previously owned homes retreated by 1% in December from the month before to an annualized rate of 3.78 million, the National Association of Realtors said Friday. December’s home sales slumped by 6% compared to last year. “The December figure is likely the low point in this cycle, and expect an uptick in the coming months,” NAR Chief Economist Lawrence Yun said. He noted that lockbox activity was up 5% in December compared to last year, which signaled more buyer demand.
“2024 is shaping up to be that pivot year where we leave the doldrums of the post-COVID slowdown, and we really pivot into the next five or six years in the housing market where we're going to see some great growth. We're going to see homebuilders meet that pent-up demand for single-family and multifamily housing,” NAHB’s Tobin added.