Homeownership Plans the latest BMO Real Financial Progress Index is predicting this year will not have a Summer of Love when it comes to homebuying.
The new index report, based on a comprehensive survey of 2,500 American adults, sheds light on the prevailing sentiment surrounding homeownership. It reveals a worrisome trend, indicating that only a mere 6% of respondents who are planning a home purchase in the near future will be actively shopping for property during the summer. The majority, a staggering 64%, stated their intention to wait for rates to drop before moving forward with their acquisitions.
However, the report goes on to paint an even bleaker picture. It highlights that 43% of the respondents are no longer sure if or when they will buy a home, leaving their homeownership plans hanging in limbo. This uncertainty is further compounded by the fact that 56% of millennial and Gen Z respondents feel that purchasing a home is increasingly out of reach compared to their parents’ generation. The dream of homeownership seems to be fading for many young Americans.
Delving into the reasons behind this
The report identifies high housing costs as one of the leading sources of financial anxiety, with 68% of respondents expressing concern in this regard. Additionally, macro issues such as individual financial situations (82%) and fears of unknown expenses (83%) dominate the overall sense of doom and gloom surrounding homeownership.
Thomas Parrish, the head of U.S. retail lending product management at BMO, stresses the historical significance of homeownership in securing long-term financial gains and achieving real financial progress. He emphasizes the importance of seeking guidance from mortgage advisors who can help prospective buyers navigate the homebuying process, determine their affordability, and dispel misconceptions about the various paths to homeownership that exist.
As the report paints a disheartening picture, it becomes evident that proactive measures and open conversations are crucial to address the challenges faced by potential homebuyers, especially in the current higher-rate environment.