Despite Some Buyer Optimism, Housing Market Concerns Persist
Uncertainty among homeowners and prospective buyers is on the rise. The most recent Homebuyer Insights Report from Bank of America shows that the share of buyers who can’t tell whether or not now is a good time to buy a home has grown from 48% to 60% in the past two years.
At the same time, however, 52% of prospective homebuyers say they’re optimistic about the state of the housing market and believe it’s better now than it was a year ago. Additionally, 75% expect home prices and interest rates to fall in the near future and are waiting until then to buy a new home, up from 62% in 2023.
Homeownership remains important to most Americans, but especially for younger generations
The dream of becoming a homeowner continues to motivate young people, with many taking on extra jobs or getting help from family to afford their homes.
In fact, 30% of homeowners in Generation Z reported paying for their down payment by taking on an extra job, which is up from 24% in 2023. Additionally, 21% of that cohort of homebuyers say they plan to pay for their down payment with a family loan, and 22% of current Gen Z homeowners say they teamed up with siblings to buy a home.
It’s not just high prices that are holding some buyers back
While affordability is a major concern for many buyers and homeowners, the growing threat of severe weather is also top of mind for many Americans. Of those surveyed, 62% of current homeowners and prospective buyers say they have concerns about the impact of severe weather and natural disasters when it comes to homeownership, and 73% feel it is important to buy homes in areas where climate risk is lower.
In the last five years, 23% of current homeowners say they have personally experienced property damage or loss due to severe weather events.
How has consumer sentiment changed over the past year?
- Homebuyer Sentiment in September 2024: A report from September 2024 showed just 19% of prospective buyers believed it was a good time to purchase a home. However, many still had high hopes that mortgage rates would go down.
- Homebuyer Sentiment Improves Slightly in January: In January 2025, 22% of surveyed consumers said they believed it was a good time to buy a home, while 78% thought otherwise.
- Consumer Housing Market Sentiment Falters: In March 2025, consumer optimism in the housing market declined year-over-year for the first time in two years.