While the historically low homeownership rate as reported by the Census Bureau has improved only marginally over the last year, a recent survey by Gallup indicates that it may be on the edge of change. Forty-nine percent of non-homeowners contacted by the polling company in March indicated they expect to buy a home within the next five years, with 10 percent planning on doing so in the next year. An additional 20 percent say they plan on being homeowners within ten years. This leaves only 28 percent with no plans to purchase a home.
Jeffrey M. Jones, who reported the story for Gallup, said these numbers have increased since the last such survey in April 2016 when 38 percent did not plan to buy in the foreseeable future. At that point 41 percent were within the five-year window. Gallup has conducted the survey in four of the last five years.
Those who plan on buying in the near future tend to be young. Of those aged 18 to 34, 52 percent plan to buy within five years as do 58 percent of those aged 35 to 54. An additional 31 percent of the younger cohort expect buy within 10 years, leaving only 14 percent who do not see homeownership in their foreseeable future. Among older non-homeowners, those over 55, only 30 percent have any plans to buy.
Jones said a separate Gallup survey recently found that 61 percent of Americans think housing prices in their area will continue to increase, the highest percentage with that opinion since 2005. He points to lack of available homes as one reason prices have been rising. "The limited number of properties for sale often receive multiple bids from the large number of families seeking houses. That dynamic is raising concerns that certain markets may become overheated." He says the results of the homebuying poll indicates that housing demand will remain strong.
They also indicate there may be constraints on housing supply. Of homeowning adults, only 4 percent expect to sell their existing homes within the year and another 20 percent plan a move within five years. Nearly two-thirds, 64 percent, do not intend to sell within the foreseeable future. Jones says these results are nearly identical to responses in the 2013 survey.
Most U.S. adults who own their home, 64%, do not think they will sell it for the foreseeable future. On the other hand, 20% expect to sell within the next five years, including 4% in the next year, while 13% plan to sell within the next 10 years. These results are nearly identical to what Gallup found when it previously asked this question in 2013.
About half of those who plan to see over the next ten years say they will be downsizing, buying a smaller or less expensive home. Roughly three in 10 say they plan to buy a bigger or more expensive home, while 13 percent will exit homeownership entirely, renting their next residence. Jones says that, not surprisingly, older homeowners planning to sell are more likely to say they will buy a smaller and less expensive house, while younger homeowners are more likely to be looking to purchase a larger home. These results are also similar to what Gallup measured four years ago.
Jones says the survey, while showing that homeownership remains an aspiration for the vast majority of Americans, also indicates that the supply of homes may not keep up with demand; more non-homeowners plan to buy homes in the next five years than homeowners plan to sell homes. The two numbers needn't match, as the ratio of homeowners to non-homeowners is about three to two, but homeowners who sell will also need new quarters, further adding to the need for housing.
Some of the shortfall in supply can be made up by new construction, Jones says, which might indicate a construction boom is on the horizon, if not already underway. "But if real estate demand continues to outpace real estate supply, home prices will continue to rise and could rise beyond what most Americans can afford. To the extent that happens, many would-be homeowners may not be able to achieve their goal of owning a home."
Gallup conducted its poll by phone with a random sample of 1,526 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia. The sample contained both homeowners and non-homeowners and was conducted March 9-29, 2017.