Nearly half of Americans believe that the economy will worsen in the next 12 months, according to a recent survey from Realtor.com®.
The August 7-8 survey, conducted with 1,000 adults in the United States, who expressed interest in buying or selling their home, or have done so in the past two years, measured each generation’s outlook on the housing market.
About 42% of Americans believed the economy would worsen, while 32% of respondents believed it would improve and 27% believed it would stay the same. The vast majority of the pessimists consisted of Baby Boomers, of which a whopping 50% believed the economy would worsen. They were followed by Gen X at 49%, Millennials at 39% and Gen Z at 31%.
Gen Z was the only group to have a majority believe the economy would improve at 38%. Only 31% of Millennials, 27% of Gen X and 33% of Baby Boomers believed the economy would improve.
Still, a sizable portion of Gen Z, Millennials and Gen X in the housing market believed the economy would persist at 31%, 30% and 25% respectively. But only 17% of Baby Boomers believed the economy would stay the same, according to the survey.
“Americans are clearly divided when it comes to the outlook for the economy and housing market, but what stands out is the optimism among younger generations,” said Joel Berner, senior economist at Realtor.com®.
The debate over interest rates showed a more equal distribution. About 33% of all U.S. citizens believe that interest rates would worsen, with the same number believing it would improve. Gen X home buyers and sellers led the survey with 38% believing that interest rates would worsen over the next year. Baby Boomers, Millennials and Gen Z followed at 34%, 33% and 27%.
Conflicts in the Federal Reserve and White House have lowered consumer confidence, leading to rippling effects in the real estate market.
The majority of Gen Z and Millennials believe that interest rates will remain consistent in the next 12 months at 40% and 36%, while a moderate portion of Gen X and Baby Boomers agree at 32% and 26%.
About 40% of Baby Boomers believe interest rates will improve, while other groups lag behind in optimism at around 30% each.
As for the future of the housing market, the majority of each generation believes it will stay the same in the next year, ranging from 30% to 42%. Only 25% of Gen Z home buyers and sellers believe the housing market will worsen. Gen X sits at the top with 37% believing the market would also get worse, followed closely by Baby Boomers at 36% and Millennials at 30%.
Most seem to not see a bright future of the housing market. Gen Z has the highest positive outlook at 35%, followed by Millennials at 28%, Baby Boomers at 26% and Gen X on the low end with 24%.
“Gen Z and Millennials have largely come of age in a period of high housing costs and volatile mortgage rates, yet they are more likely than older generations to believe conditions will hold steady or even improve,” Berner said. “That optimism could be a powerful driver of housing demand in the years ahead, as younger buyers remain motivated to enter the market despite ongoing affordability challenges.”
