Homebuying Attitudes Hit Record Low as Affordability Becomes Leading Campaign Issue Among Young Voters
Written By: Joel Palmer, Op-Ed Writer
Consumer attitudes toward homebuying conditions, as expressed by Fannie Mae’s monthly Home Purchase Sentiment Index, reached an all-time survey low in May.
Housing affordability has risen to become one of the top issues in the upcoming presidential election, and one survey shows it’s the number-one issue among the youngest generation.
The Fannie Mae Home Purchase Sentiment Index decreased 2.5 points in May to 69.4, which is 3.8 points higher than the beginning of the year.
But dragging the index down this month is the attitude toward buying a home. Only 14 percent of respondents indicated that it’s a good time to buy a home, down from 20 percent the previous month. The remaining 86 percent say it’s a bad time to buy.
The share believing it’s a good time to sell fell from 67 percent to 64 percent. Meanwhile, consumers continue to believe affordability will remain tight for the foreseeable future, as respondents believe that, on net, home prices and mortgage rates will go up over the next year.
“Consumer sentiment toward housing declined from its recent plateau, as an increasing share of consumers struggle to find the positives in the current housing market,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “While many respondents expressed optimism at the beginning of the year that mortgage rates would decline, that simply hasn’t happened, and current sentiment reflects pent-up frustration with the overall lack of purchase affordability.”
That frustration may help determine who wins the presidential election in November, according to a recent Redfin survey.
The real estate firm surveyed 3,000 people representing the four adult generations: Gen Z, Millennials, Gen X and Baby Boomers.
Among the older three generations, housing affordability was considered an important campaign issue among at least 80 percent of respondents.
Among Generation Z, housing affordability was the top issue among respondents, with 91 percent saying it’s an important consideration in determining who they will vote for.
Redfin noted that the issue is particularly important to young Americans because they are aging into homeownership, yet only 26 percent of that age group own a home. Since they are mostly first-time buyers, it’s more difficult for them to break into today’s expensive market because they don’t have equity from a previous home sale to put toward their down payment and mortgage payments.
In addition, renting a home has also become much more expensive over the last several years, largely because demand for rentals surged during the pandemic. The median U.S. asking rent has increased more than 20 percent since 2019.
“Housing affordability is a cornerstone of this year’s presidential election because even though the economy is fairly strong, unemployment is low and wages are rising, buying a home feels impossible for many Americans,” said Redfin Senior Economist Elijah de la Campa.
“This is particularly the case for young people, who have seen the cost of starter homes increase twice as fast as incomes. Young people care about other political issues, like immigration and abortion rights, but they’re more likely to cite housing affordability as a factor in their vote because it directly impacts the roof over their head, their lifestyle and their ability to build wealth.”
About the Author
As an NAMP® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
