The economic outlook in the U.S. isn’t so hot right now. A record-breaking number of Americans filed unemployment claims in recent months, the stock market is all over the place and the hits from the COVID-19 pandemic just keep coming.
But despite the economic turmoil, a surprising number of Americans still think 2020 is an ideal time to buy a home. According to a recent survey by The Simple Dollar, three in ten (30%) Americans think this year is the best time to purchase a house or property.
What isn’t surprising is why — out of the 30% of Americans who think 2020 is an ideal time to buy a home, 68% cited low mortgage interest rates as an advantage or opportunity when buying a home or property in 2020. Given that mortgage rates are at record lows, this rationale makes perfect sense.
Survey results
- 30% agree with the statement that 2020 is an ideal time for [them] to buy a home or property
- 68% of those in agreement see low mortgage interest rates as an advantage or opportunity for buying a home or property in 2020
- 51% of homeowners and renters disagree with the statement that 2020 is an ideal time for them to buy a home or property
- Of those Americans who disagree, 41% think 2020 is not an ideal time to buy a home or property because of the economy and/or market uncertainty
- Only 7% of Americans who disagree with the statement feel that the burden of the online buying process is a reason not to buy a home or property
30% agree with the statement that 2020 is an ideal time for [them] to buy a home or property
Even with the negative economic impact from the coronavirus pandemic, almost a third of Americans feel that 2020 is the ideal time for buying a home or property. Ten percent(10%) of survey respondents strongly agreed that it’s the right time, while another 21% somewhat agreed with that statement.
On the other hand, 31% of survey respondents strongly disagreed with the statement that 2020 is an ideal time for them to buy a home.
[ Read more: 10-Year Fixed Mortgage Rates ]
68% of those in agreement see low mortgage interest rates as an advantage or opportunity to buying a home or property in 2020
Of the 30% of survey participants who agreed with the statement, 68% cited low mortgage interest rates as the advantage of buying a home during this time. Given that interest rates have recently dropped to record-breaking lows, this is, in fact, a historically good time to take out a home loan from an interest rate perspective. Refinancing rates have fluctuated with demand recently, but overall, mortgage purchase rates have remained very low — in some cases under 3%.
40% also thought that lower home prices were an added opportunity when buying during 2020, while 30% cited lower competition from other buyers as an advantage of buying in 2020. What’s interesting about those two stats is that while some markets may have seen a drop in home prices due to the pandemic, most markets are actually seeing the opposite.
Low mortgage interest rates and limited inventory have actually caused bidding wars in a lot of housing markets — including Boston, Salt Lake City and San Diego — and home sales in markets that took harder hits have also started to rebound. Furthermore, a widespread home inventory shortage has been driving home prices up and causing more competition between buyers, who are looking for homes with fewer options available.
Given that prices are high in many markets and competition is stiff, it’s surprising to see a large portion of survey participants cite lower home prices and less competition as advantages to buying homes right now.
Another interesting takeaway from the study was that of the adults who agreed that 2020 was an ideal time for a property purchase, 7% stated that there were no advantages or opportunities to buying a home in 2020.
51% of homeowners and renters disagree with the statement that 2020 is an ideal time for them to buy a home or property
Given the current economic climate, it makes perfect sense that 51% of homeowners and renters disagreed with the statement that 2020 is an ideal time to buy a home or property. Jobs are hard to come by right now, and there were over 30 million people out of work as of the end of July, which is likely making a large number of Americans tepid about the idea of purchasing a home. And that’s precisely what the study showed.
[Read: 15-Year or 30-Year Fixed Mortgage: Which Is Right for You?]
41% of Americans who disagreed think 2020 is not an ideal time to buy a home or property because of the economy and/or market uncertainty
At 41%, concern about economic and market uncertainty was the top reason study participants disagreed with 2020 being an ideal time to purchase a home or property. Job loss and income reduction were cited by 25% of the survey participants who did not think that 2020 was the ideal time to buy a home. High property values were cited by 23% of study participants who disagreed, and 21% cited not having enough for a down payment as making a property purchase in 2020 less than ideal for them.
Surprisingly, 11% cited the credit scare as the reason that 2020 is not an ideal time for a home purchase, while 7% noted that having to use an online buying process made it less than ideal. About 5% cited changing lender standards as the cause of 2020 being less than ideal for a home purchase.
To be clear, that 5% of study participants who cited lender changes are right on the money with their concerns. Lender belts have, in fact, been tightening in response to the COVD-19 pandemic — and it’s harder now than it has been in recent years to get a mortgage loan.
36% of the study participants who don’t find 2020 to be the right time for a home purchase also noted they were not interested or did not plan to buy a property in 2020.
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Survey methodology
The Simple Dollar commissioned YouGov Plc to conduct this survey. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 1,205 adults. Fieldwork was undertaken between July 27-28, 2020. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+).
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