Inflation and the cost of living are top of mind for many Americans heading into 2023. While we don’t know what the new year holds, we do know how Americans are feeling about their finances and home buying based on a new study.
The outlook on home buying trends in 2023 shows that most Americans (61%) cannot afford a home right now, and 1 in 5 believe they’ll never be able to afford a home.
The Housing Market
The housing market continues to be a huge variable in homeownership for many Americans. Nearly 1 in 2 (48%) are worried about a housing market crash, and over 2 in 5 fully believe that a crash will happen in 2023.
But the grass isn’t always greener on the other side. When it comes to renters, 60% say they’re struggling to pay for rent, and over half (58%) say their monthly rent increased in 2022. New year, new possibilities? Maybe… but 73% say they expect rent to increase due to inflation.
So what are Americans looking for? 38% say they would move states in search of lower taxes, and 40% say rising interest rates impact the commitment to buying at all. Of those who are looking to buy, 46% say they are willing to go over budget to buy their dream home – by a whopping $84,500!
The housing market remains a significant factor in homeownership for many Americans, with nearly half expressing concern about a potential market crash.
Factors such as inflation and a potential recession are believed to contribute to this potential crash. However, some believe the crash may not be as severe as the 2008 one, while others believe it will be worse. Renters are also facing challenges, with a majority reporting an increase in rent and difficulty paying due to inflation. On the other hand, some homeowners are optimistic that mortgage rates may decrease in the near future.
Buying a Home Is a Rite of Passage
Ryan Graves, CFA, Bemiston Asset Management, says, “For many Americans, buying a home is a rite of passage. Buying a home is much more difficult now, as interest rates and prices have surged in recent years. Those who want to own a home must take more drastic measures than previous homeowners. Downsizing apartments is a great way to save on monthly expenses and pocket extra cash.”
In December 2022, craftjack.com surveyed 1,005 Americans to get their feedback on homeownership and what this year will bring in terms of a homeowner’s outlook. Respondents were 48% female, 50% male, and 2% non-binary/non-conforming with an age range of 18 to 84 and an average age of 40 years old.
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This post originally appeared on A Dime Saved