Fewer Americans Are Planning to Buy a Home in Over a Decade

The number of Americans planning to buy a home is at its lowest level in 12 years, according to The Conference Board Consumer Confidence Index.

The report, based on market research of more than 36 million consumers, found that consumer confidence rose generally, but Americans were still reluctant to make a home purchase.

“Overall consumer confidence rose in August but remained within the narrow range that has prevailed over the past two years,” said Dana M. Peterson, chief economist at The Conference Board, in the report.

“Consumers continued to express mixed feelings in August. Compared to July, they were more positive about business conditions, both current and future, but also more concerned about the labor market.”

Rising home prices from 2021 to 2023 made homebuying far less affordable in many areas, according to real estate broker Pila Jessie of KHORR Realty.

“These price hikes coupled with a fast interest rate hike leaves fewer people about to purchase, which is leading to fewer buyers in the market,” Jessie told Newsweek. “Ironically, the market isn’t simmering down in many areas of the country as most predicted.”

Interest rates have been a particular concern for potential homebuyers. With rates set at 5.5 percent, still hovering around a 15- to 20-year high, many are still struggling to get their foot in the door of homeownership.

There are some signs of hope, though. The number of people expecting higher interest rates dropped to 46.5 percent, the lowest since February 2024. Meanwhile, the number of people expecting lower rates grew to 31.5 percent.

Generally, Americans saw business conditions as more favorable, with 20.8 percent saying conditions were “good” despite the larger housing woes.

“It is not surprising to see that potential homeowners are on the sidelines till conditions change dramatically,” nationwide title and escrow expert Alan Chang told Newsweek. “Inflation is still a continued pain point for most Americans, which adds to the unaffordable pain of purchasing real estate.”

Kevin Thompson, a finance expert and founder and CEO of 9i Capital Group, said that many younger Americans have been priced out of homeownership due to increasing costs.

“Larger down payments and the need to have more liquidity in general have forced many individuals to forgo homeownership,” Thompson told Newsweek. “Outside these generalities come the fact Americans are wanting flexibility. Gone are the days where you can stay in a neighborhood for 20 plus years and know thy neighbor because people are constantly changing jobs and locations.”

Thompson said the reduced number of homebuyers who are searching likely will not change in the current job market, especially as it continues to lean remote.

“People are often left to sell their homes quickly and move to different locations in this new environment and may find it conducive to rent and/or lease space for shorter time periods in expectations of moving to greener pastures,” Thompson said. “Furthermore, with the advent of remote work, people are more likely to want to work from anywhere while having the flexibility to uproot themselves at a moment’s notice.”

Chang said timing when the market will improve for homebuyers would be “difficult, if not impossible.”

“Each individual needs to crunch the numbers to see if renting or buying is the best option,” Chang said. “There is no magic one-sized solution.”