With inflation, supply chain issues, and the war in Ukraine, many Americans are deciding that buying that new car, flashy treadmill, or big vacation they’re planning may expect.
People are adjusting their shopping habits as they face price increases affecting everything from grocery shopping to home heating bills. Prices are rising in part due to ongoing supply chain issues, which are also making some goods harder to find due to delays at global ports and shipping channels. Meanwhile, the conflict in Ukraine is upending global markets, sowing the seeds of economic uncertainty and sending gas prices skyrocketing.
All of these factors are stretching household budgets and as a result consumers are foregoing larger, non-essential purchases in the hope that prices will eventually come down. Here are the purchases most often delayed, according to a new investigation of more than 2,200 people conducted last month by Morning Consult.
According to the Morning Consult survey, 74% of people considered buying a new car in the last month but decided to wait. About half of those people cited high prices as the reason, while 27% of that group said they didn’t make the purchase due to inventory issues.
Prices for new cars and trucks have soared 12% over the past year, according to Data from the Bureau of Labor Statistics, or BLS. Data from Edmunds, an automotive research firm, showed that 82% of new car buyers in January paid more than the manufacturer’s suggested retail price for their vehicles.
Morning Consult found similar trends for used cars: 71% of respondents said they considered buying a new car in February, but ultimately didn’t make the purchase. Of this group, 48% cited higher prices as the reason, while 28% cited equity issues. Used car prices are rising 41% on an annual basis, according to the BLS.
Perhaps unsurprisingly given the constantly boiling housing market, home purchases were also on the list.
More than two-thirds of respondents to the Morning Consult survey said they were considering buying a new house or apartment in February, but decided to delay. Half of those people said high prices were the main reason they didn’t follow through with the purchase, while 30% cited availability issues.
The typical listing price for a home in the United States is now approaching $400,000, according to data from Realtor.com – up 13% from last year and nearly $100,000 more than the typical listing price of three years ago – due to growing demand and a severe shortage of inventory.
“Just because so many American adults didn’t buy a car or a house in the last month doesn’t mean they no longer need a car or a house,” said analyst Kayla Bruun. Economics of Morning Consult. writing. “Instead, it means a shift in how Americans view these buying decisions: they think it’s better not to buy now.”
Holidays, treadmills and refrigerators
Of course, Americans aren’t just holding back on life’s biggest purchases. They’re also delaying spending on other non-essential items, including exercise equipment, furniture, appliances, travel and more, Morning Consult found.
As is the case with these delayed car and home purchases, consumers are blaming a combination of rising prices and availability issues.
These issues could be exacerbated by the ongoing conflict in Ukraine, which has the potential to disrupt shipping and travel even further afield. Oh, and don’t forget the global shortage of semiconductors, the essential computer chips that power everything from cars to cellphones to appliances.
It’s just “one shock on another”, as Joseph Brusuelas, chief economist of accounting group RSM, once told Money.
What people are purchases: groceries and gas
The report notes that items like groceries, gasoline and other necessities aren’t high on the list because they’re just that: necessary. Only 12% of respondents said they delayed buying certain types of groceries and food in February, and the majority of this group cited inventory and availability issues as the reason they waited.
Even though prices are rising dramatically — especially for gasoline, which has now topped $5 a gallon in some cities — consumer habits haven’t changed much in these categories.
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