BUSINESS + ECONOMY

Spending is trending but it’s making home buying even harder

Nov 20, 2023, 5:00 PM

Inflation has frustrated home buyers, with many feeling like they'll never buy a house. But spendin...

Inflation has frustrated home buyers, with many feeling like they'll never buy a house. But spending is part of what has driven it so high. (Canva)

(Canva)

SALT LAKE CITY — Inflation has frustrated home buyers, with many feeling like they’ll never be able to afford a house. But American spending is part of what has driven inflation so high. The more spending and demand, the more prices will soar.

Additionally, people often adopt a “recency bias,” meaning they think that their current situation is how life will always be.

“We obviously know that’s not true, but it feels that way,” said Certified Financial Planner with Deseret Mutual Benefit Administrators Shane Stewart. “Just hold on.  Things will change in the economy. Things will change with interest rates. Things will change with the value of homes. And you’re ability to buy a home will change.”

The recency bias often leads to people feeling defeated. They don’t think there is a point in saving and working toward a goal if they don’t believe it’ll ever happen. However, history shows us that the economy is cyclical.

“Get ready for it.  Don’t just spend your money on leisure goods,” Stewart said. “Put that money away for a down payment on a home.”

Post-pandemic, people have been doing a lot of spending because they feel like they can finally go out and do things that they couldn’t before. 

But Stewart said our spending has gotten a little out of control.

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Spending is trending but it’s making home buying even harder