Prospective home buyers will find that the current market presents the worst time to buy a home in a generation.
- The majority of consumers are now rating home buying conditions as bad, according to a University of Michigan survey.
- Many of those surveyed consider high interest rates to be the main cause of poor market conditions.
- Mortgage rates have reached above 7% as the market struggles due to the Federal Reserve hiking interest rates.
Why it’s news
High rates aren’t just affecting the housing market. Overall costs for household durable goods are higher for consumers. The costs for buying large items like new vehicles are still outside the reach of many buyers though some of those costs are coming down.
During November, consumer sentiment fell to 54.7, a decrease from the previous months. Sentiment had risen in the summer, but the new drop erased all progress.
The survey also found that the expected inflation rate has risen from last month. The findings come shortly after Thursday’s Consumer Price Index (CPI) report had better-than-expected results.
Consumers anticipating higher prices could have a real effect on whether or not inflation decreases, Barron’s reports. Workers expecting higher costs of living will ask for higher wages resulting in costs being passed down to consumers and inflating prices.
However, Michigan’s survey was taken before the CPI was released, meaning consumer expectations could have shifted.