Is 2020 the year to buy a home? Here’s what consumers are saying.
The answer is a consistent “yes,” but with consumers citing some important barriers to home purchase, and thoughts about rising costs and interest rates.
According to the latest Freedom Debt Relief survey, 56% of Americans believe 2020 is a good year to buy a home. Optimism runs especially high in the Silent Generation, with 76% agreeing. Fifty-eight percent of Baby Boomers think it will be a good year for a home purchase, followed by 56% of Millennials, 52% of GenXers and 51% of GenZers.
Increasing Home Prices, Mortgage Rates
Amid this optimism, 54% of consumers believe that home prices will increase during the year, and 46% believe mortgage rates will increase.
At least half the respondents in every generation think home prices will increase.
Baby Boomer: 58%
Silent Generation: 65%
Slightly fewer respondents (46%) believe mortgage rates will increase over the next 12 months. A quarter (25%) think they will stay the same, while 12% think they will drop. More Millennials believe rates will rise than do other generations.
GenZ: 45% believe mortgage rates will increase in the next 12 months.
Baby Boomer: 43%
Silent Generation: 32%
Barriers To Home Buying
When asked which of the following they consider as barriers to buying a home in 2020, 41% of respondents said it was the cost of the down payment.
Among the generations, 44% of GenXers cited this as a barrier, while 43% of Millennials and 42% of Baby Boomers did.
High Housing Expenses
When asked to rank living expenses, 44% of respondents cited housing (rent or mortgage) as their highest expense. In fact, every generation ranked housing as the top expense:
GenZ; 23% said housing was their highest expense
Baby Boomers: 46%
Silent Generation: 28%
Overall, 28% of survey respondents said that the cost of housing cost more than they had anticipated in 2019. However, 35% of Millennials, 27% of GenXers and 29% of GenZers said it was more than expected. Only 12% of the Silent Generation and 21% of Baby Boomers found the cost more than anticipated.
Among survey respondents, 29% carry mortgage debt. The breakout among generations is:
Baby Boomers: 34%
Silent Generation: 24%
While most Americans believe 2020 is a good year to buy a home, the relative cost of housing, the inability to save for a down payment, and the cost of the monthly payments presents significant barriers to purchase for most people.
Methodology: Freedom Financial Network commissioned Atomik Research to run an online survey of 2,005 individuals in the United States. The margin of error is +/- 2 percentage points with a confidence level of 95 percent. The fieldwork took place Jan. 10-13, 2020. Atomik Research is an independent creative market research agency. Download the raw data here.