US homebuyers persevere despite high rates, prices

HOMEBUYERS in the US are still committed to their plans to buy a property despite rising interest rates, high inflation and slowing growth, according to a study by Bank of America published on Tuesday (May 9).

Of the 1,000 respondents surveyed, 54 per cent said they will speed up their home purchase plans, or stick to their original timing, even as prices rise and inventory stays low. Buying a home is an even bigger priority for people under 40 than any other age groups, the study showed.

“Gen Z and millennials are showing extreme resilience, even though the market is more competitive,” Matt Vernon, head of retail lending at Bank of America, told Reuters. “The dream of home ownership is alive and well despite the challenges.”

Buyers are still determined even though conditions are advantageous to sellers, he said.

While more US customers are falling behind on their loan payments, the bank said its lending activities remain steady.

“We are not seeing any tightening from a credit perspective, as of now,” said Vernon.

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Consumers still aspire to buy homes even though US consumer confidence has weakened to a nine-month low. The share of Americans planning to buy major household appliances over the next six months has fallen to the lowest level since 2011.

By contrast, new home sales surged 9.6 per cent to a seasonally adjusted annual rate of 683,000 units in March, the highest level since March 2022.

Almost half of the prospective buyers surveyed by the bank said they were looking to buy a house because they are tired of renting and rent increases. Other reasons include financial security and the desire to start building equity. REUTERS