Should I buy a house? That is the question on Americans’ minds — literally, Google search data shows.
Google searches in the U.S. for “Should I buy a house” doubled in March from last month, reaching an all-time high last week, according to Meyers Research. The jump could mean that potential homebuyers are torn between taking advantage of historically low interest rates and waiting to see the effect that the coronavirus outbreak will have on the economy.
“Why are they [Americans] searching that [“Should I buy a house”]? Is it because rates are low, and they want to buy? Or because they were looking, and now they wonder if it’s still OK to buy?,” said Ali Wolf, director of economic research for Meyers Research, who flagged the data from Google Trends, a real-time indicator of consumer sentiment. Google began collecting search data in 2004.
Since the beginning of March, Google users in the U.S. also searched “Mortgage loan” more than they did any month prior, double the rate of searches in February. The phrase “Mortgage rates today” also reached its all-time high last week on Google Trends.
Searches for “Should I buy a house” and “Mortgage rates today” peaked on March 3, and searches for “Mortgage loan” peaked on March 4, following the Federal Reserve’s sudden move to cut interest rates by 50 basis points to combat the economic impact of the coronavirus. The 30-year fixed mortgage rate fell to a record low of 3.29% last week, according to Freddie Mac, and experts predict mortgage rates will continue to fall.
Google searches may not translate into actual home purchase
But the Google search frenzy does not necessarily mean people will buy a home. The last time search activity for homebuying peaked was in June 2018 and the housing market actually slowed down, according to Wolf.
Currently though, mortgage rates are more than 100 basis points lower than they were in June 2018, which could counteract previous effects, she said. But this time around, given concerns over the coronavirus it is unclear whether Americans will be ready to pull the trigger on a home purchase.
Action-oriented searches, like “Applying for a mortgage,” have not substantially changed since coronavirus fears hit the economy, and searches for real estate listing sites have stayed relatively steady. Americans are searching “Zillow” at the same rate they did in March 2019 and “Realtor.com” 3% less, while “Trulia” had a 12% dip in searches year-over-year. Searches for the phrase “homes for sale,” are slightly down from its peak in summer 2019, but is 2% higher than this time last year.
Whether the coronavirus or low interest rates tip the housing market could depend on whether the U.S. economy falls into a recession.
“The housing market is somewhat dependent on jobs, so as long as layoffs aren’t deep and aren’t kicking in soon, the housing market can chug along,” she said.
Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter
