How out of whack is the housing market?
Well, an October poll by LendingTree of 2,045 US adults found 35% want the housing market to crash – highlighted by youthful Gen Z-ers (53%) and millennials (46%).
Look, rooting for a bargain is as American as apple pie. Who doesn’t hope for that big sale, deep-discount coupon or holiday pricing to stretch the budget?
So why not housing? Affordability anxiety of late is a real fear.
Think about the nearly 40% of non-homeowners from Gen Z (ages 18 to 26) and the millennial crowd (27 to 42) who told pollsters they feel a steep market pullback is the only way a home purchase will ever pencil for their finances.
It’s not just budget-strapped ownership seekers wishing for a home-price dip. Even 36% of owners surveyed hope for a crash.
Why? Well, 15% want to lower their property taxes and another 15% believe a price correction would help stabilize the market.
Various cures
There are various ways housing affordability headaches could be cured.
Say, vastly lower mortgage rates (which is not happening any year soon), a building boom of starter homes (also, a low probability), or huge gains in incomes (just as unlikely). A house hunter could pray for a wealthy and generous relative who’d contribute to a purchase.
Mostly, folks hope for falling prices as a quicker fix.
The poll found 44% think housing is at risk of a crash in 2024 vs. 31% who are unsure about the future and 25% who see no chance of an implosion.
The price-decline vibe skews by age. Risks of a 2024 housing debacle are seen by 52% of millennials and 48% of Gen Z-ers compared with 42% of Gen X-ers (ages 43 to 58) and 30% of boomers (59 to 77).
Perhaps the kids don’t have the economic experience to judge housing conditions. Conversely, maybe the judgment of older folks is clouded by hopes of keeping the pandemic era’s noteworthy home-price gains.
But it’s not just renters sensing discounted prices ahead: More homeowners see crash risks (46%) than non-owners (41%).
Already crashed
These housing anxieties are not misplaced.
Pricey mortgage rates and stubbornly high home prices have sliced sales volumes down to near-historic lows. So in homebuying terms, the market has already crashed.
Now, a wobbly housing market doesn’t have to go into a price free fall like the middle of the 2000s after a bubble burst. Housing could just stay in a sluggish mode for several years. Just look back to the early 1990s and its extended homebuying doldrums after a late 1980s boom.
This poll reminds us that sellers and buyers have differing views on home values.
Price declines were the No. 1 worry of the homeowners surveyed – but the smallest worry of non-owners.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com