Bank of America sees major housing shift despite high mortgage rates

Homebuyers were expected to stay frozen, while sellers were supposed to wait. 

With mortgage rates still elevated, prices still stretched, and inventory still tight, the housing market looked trapped in a standoff similar to the one that has prevailed for most of the past two years.

Bank of America says that may be starting to change.

The bank’s latest homebuyer survey points to a major shift in consumer psychology, with more Americans signaling they are no longer willing to sit out the market indefinitely, according to Reuters. 

Buyers expected relief from lower rates or cheaper homes. However, many appear to be accepting the rough reality and moving forward anyway.

Affordability is still blocking deals, but buyer intent is rising.

Naturally, that raises the question of whether a modest change in confidence could reshape demand, seller timing, and the next leg of the U.S. housing market.

What Bank of America found in its homebuyer survey 

A new Bank of America survey shows that the housing market is still strained but no longer frozen in the same way, with preference being the clearest shift. 

In a poll of 2,000 consumers, 53% said they now favor buying a home, while 47% favored renting or moving in with family. 

It marks the first time since 2023 that sentiment has tilted back toward ownership.

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That does not mean buyers suddenly feel comfortable, however. BofA found that 71% of respondents are still waiting for mortgage rates and home prices to fall before purchasing. But that is down from 75% in 2025, suggesting the wait-for-relief mindset is weakening.

Perhaps the bigger signal is timing. 

About 22% of homeowners said they plan to buy another property within the next year, up from 15% in 2025. For some context, existing owners have been the primary source of housing gridlock, with many reluctant to give up lower mortgage rates.

BofA Head of Consumer Lending Matt Vernon said affordability remains the main barrier, but buyer intent is rising as life events continue to push people toward purchases.

"Despite real and persistent challenges in the market, buyers and owners are ​increasingly optimistic, and many are starting to move forward rather than waiting on the sidelines. We are seeing meaningful changes in attitudes toward homeownership," Vernon said of the report’s results. 

The survey also shows how behavior is changing. One in five prospective buyers and homeowners used AI tools or chatbots in the past year to calculate costs, scout neighborhoods, or track market trends.

Caroline Brehman&solBloomberg via Getty Images

Key housing data behind BofA’s report

• Mortgage rates remain the primary pressure point, with the 30-year fixed rate averaging 6.47% last week, according to Fox Business.
• Inflation is still blocking relief, as Reuters reported that U.S. CPI rose 4.2% year over year in May, the largest gain since April 2023.
• Existing-home demand showed signs of life, with sales rising 3.2% in May to a 4.17 million annual rate, Reuters said.
• New-home sales moved the other way, falling 7.3% in May to 580,000, the lowest level since January, according to Reuters.
• Construction remains tight, with single-family starts falling 1.9% in May and total starts dropping 15.4%, Reuters reported.

How Gen Z and Millennials are changing the housing market

Gen Z and Millennials have been effectively reshaping housing under pressure.

Bank of America’s latest survey found that younger buyers are leading the shift away from waiting for perfect conditions, according to Reuters. It’s important to note that these groups are more likely to be first-time buyers, more rate-sensitive, and more exposed to rent inflation than older homeowners with equity.

But the entry point is brutal. 

According to the National Association of Realtors, first-time buyers made up only 21% of all buyers in its 2026 generational report, the lowest share since NAR began tracking the data in 1981. Millennials still represented 26% of buyers, while Gen Z accounted for just 4%.

Nonetheless, younger households are using different strategies.

Redfin said Gen Z’s homeownership rate rose to 27.1% in 2025 from 26.1% a year earlier, while Millennials edged up to 55.4% from 54.9%. The gains were modest, but they show younger buyers are still finding ways in, despite high costs.

Realtor.com’s data show the other side of the same story. A record 25.2 million adults under 35 lived with parents in 2025, roughly one in three young adults. That points to delayed household formation, not a lack of desire.

That said, Gen Z and Millennials are creating pent-up demand, using family help, and buying selectively, becoming the pressure point that could define their next phase.

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