With plans to await rate cuts and pull money from retirement, 73% of potential home buyers say the goal of owning a home seems unattainable.
As nearly 71% of prospective home buyers await rate cuts, 68% say housing costs are causing financial anxiety, according to the latest BMO Real Financial Progress Index.
73% of aspiring homeowners say the goal of owning their own home seems unattainable.
Most Americans (68%) say housing costs are causing financial anxiety.
The latest BMO Real Financial Progress Index finds current interest rates are hindering most prospective homebuyers from purchasing a home, with nearly three fourths (71%) waiting on rate cuts before entering the market – up from 64% this time last year. Among those who do plan to buy a home, nearly one-third (30%) say they plan to pull money from their 401(k)-retirement plan to help cover the cost.
Two years after the Federal Reserve began raising interest rates – in turn, leading to an increase in mortgage rates – and amid elevated home prices with limited inventory, Americans will likely have to hold out through another summer for potential relief, according to BMO Economics.
“In light of persistent strength in the U.S. economy, as well as stubborn underlying inflation, the market has been pushing its expectation for Fed rate cuts into the autumn,” said Michael Gregory, Deputy Chief Economist at BMO. “Looking ahead to 2025, we expect the Fed to stick to a gradual rate cut pattern.”