A young adult in their home.
Inflation and interest rate hikes have made housing unaffordable for many Americans.
As demand fades, the housing market could be bracing for a crash or correction.
Data from ConsumerAffairs shows that of all age groups, Gen Z is most hopeful for a crash.
As homebuyer activity becomes increasingly frigid, talk has been simmering for months about the possibility of the entire US real estate market imploding.
Although experts are divided on whether or not America’s housing ecosystem is bracing for a correction or a crash, new data from analytics company ConsumerAffairs shows that many Americans are expecting — and in some cases hoping for — the latter.
Especially the young adults.
The company surveyed 1,003 Americans to gauge their perceptions on a potential housing crisis. According to their results, 78% of respondents think we’ll soon face a housing market crash and nearly half believe it will happen in 2023.
Of all demographics, Gen Z is the group that wants it the most.
Indeed, 84% of the survey’s respondents born between 1996 and 2015 said they wanted a market crash. Their reasoning: the hope that a crash will help them better afford a future home purchase.
“Gen Z was the generation most likely to want a housing crash or correction so they could buy a home,” researchers wrote. “Despite their hopes for a cooler market, Gen Zers have the least saved for a home.”
In 2022, housing affordability has fallen to a three-decade low. The downturn stems from a combination of factors but mainly rising inflation and interest rates, as well as a dearth of supply that has kept buyers competing for a limited amount of housing stock. As some of the factors that contributed to the housing crash of the mid-aughts reemerge — like soaring home prices and fading buyer demand — it’s no surprise that Gen-Z, a demographic experiencing the most challenges to homeownership, is rooting for an icy market downturn.
After all, market crashes have led to depreciating home values in the real estate market. This was the case in 2008, when a bursting housing bubble contributed to a global recession that triggered rapid price declines in the US.
However, despite Gen Z’s expectations and a few bearish outlooks, the majority of experts maintain that prices are unlikely to plummet like they did before. Instead they expect something more like a correction, which …read more
Source:: Business Insider