Research suggests that Americans are now less optimistic about getting themselves their own homes, as housing prices continue to rise while wages continue to remain the same. What does this mean for the real estate market?
A report from the Home Purchase Sentiment Index revealed that Americans are less optimistic about buying their own homes, Realtor.com reported. The index dropped 1.7 points from 83.2 points in December to 81.5 points in January.
The said drop was due to the stagnant wages and climbing housing prices in the real estate market.
"Jobs are increasing, but wages really haven't caught up," said Jonathan Bowles from the Center for an Urban Future in New York City.
The director of strategic research at Fannie Mae also noted that in order for people to become more optimistic about purchasing their own homes rather than renting, they need to see an increase in their salary.
The publication further noted that the stagnant wage of Americans coupled with the rising prices of houses in the real estate market may eventually lead to "a smaller share of Americans who own property, as few first-time home buyers have the resources to break into the market."
As previously reported here on Realty Today, there are a couple of ways for first-time homebuyers to quickly and easily save up on the down payment of their dream house.
Changing some of your routines such as packing lunch for work instead of eating out and buying drinks outside may help save you a lot on food expenses alone. Choosing to move to a cheaper apartment may also help you add up to your savings for the down payment.
The aforementioned publication also reported that lower mortgage rates may attract more people into purchasing their own homes, as prices of rents are also increasing.
"The alternative to buying a home [renting] isn't more attractive - especially for the longer term. Rents already in most places [exceed] what it costs to buy a home with a mortgage," said the publication's chief economist Jonathan Smoke.
