Unaffordable Prices Are Most Common Reason Buyers Can’t Make Purchase

2023-05-04T09:14:50-05:00

By Rose Quint on May 4, 2023 • An earlier post revealed that 71% of buyers who were actively engaged in the process of finding a home in the first quarter of 2023 have spent 3+ months searching for a home without success. The inability to find an affordable home remains the most common reason buyers looking for 3+ months can’t make a purchase, cited by 40% (compared to 45% who cited it a quarter earlier).  In second place is the inability to find a home with desirable features (35%), followed by the inability to find a home in a desirable neighborhood (33%) and getting outbid (30%). When asked what they are most likely to do next if still unable to find a home in the next few months, 40% of active buyers searching for 3+ months said they will continue looking for the ‘right’ home in the same location (a share that’s been trending down since reaching 52% a year ago); 40% will expand their search area, 27% will accept a smaller/older home, and 26% will buy a more expensive home. Meanwhile, the share who plan to give up their home search until next year or later edged up to 23%, up from 21% in the fourth quarter of 2022. *Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets.  The HTR is produced quarterly to track changes in buyers’ perceptions over time.  All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult.  Results are seasonally adjusted.  A description of the poll’s methodology and sample characteristics can be found here.  This is the final in a series of six posts highlighting results for the 1st quarter of 2023. See previous posts on plans to buy, new vs. existing preference, housing availability, and housing affordability, and active buyers. Related ‹ The Fed Hints at an End for Rate HikesTags: housing economics, housing trends report

Unaffordable Prices Are Most Common Reason Buyers Can’t Make Purchase2023-05-04T09:14:50-05:00

Improved Affordability Expectations Lead to More Engaged Buyers

2023-05-01T09:16:52-05:00

By Rose Quint on May 1, 2023 • Improvements in affordability expectations have led to an increase in the share of prospective buyers who have moved beyond just the planning phase of their home search: 56% report being actively engaged in the purchase process in the first quarter of 2023, up from 46% a quarter earlier. The share of prospective buyers actively searching for a home rose in every region between the final quarter of 2022 and the first quarter of 2023: Northeast (50% to 63%), Midwest (42% to 45%), South (47% to 51%), and West (44% to 66%). Improved affordability, however, has intensified demand and increased competition.  Buyers actively looking for a home are having a harder time finding what they want.  In the first quarter of 2023, a series high of 71% have spent 3+ months searching, up from 65% a quarter earlier. * Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets.  The HTR is produced quarterly to track changes in buyers’ perceptions over time.  All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult.  Results are seasonally adjusted.  A description of the poll’s methodology and sample characteristics can be found here. This is the fifth in a series of six posts highlighting results for the 1st quarter of 2023.  See previous post on plans to buy and new vs. existing preferences, and housing availability, and housing affordability. Related ‹ Personal Income Rises 0.3% in MarchTags: housing affordability, housing economics, housing trends report

Improved Affordability Expectations Lead to More Engaged Buyers2023-05-01T09:16:52-05:00

Housing Affordability Expectations Improve

2023-04-28T09:19:17-05:00

By Rose Quint on April 28, 2023 • Relatively lower interest rates (compared to fall 2022), slowing growth in home prices, and builder incentives are making an impact on buyers’ affordability expectations.  In the first quarter of 2023, 73% of buyers reported being able to afford less than half the homes for-sale in their markets, down from a record high of 87% in the final quarter of 2022.  On the flip side, the share able to afford most homes available doubled from 13% to 27% during this period. Affordability expectations between the final quarter of 2022 and the first quarter of 2023 improved in all regions.  The share of buyers able to afford less than half the homes available in their markets dropped in the Northeast, from 89% to 75%; in the Midwest, from 84% to 73%; in the South, from 83% to 76%, and in the West, from 87% to 66%. * Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets.  The HTR is produced quarterly to track changes in buyers’ perceptions over time.  All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult.  Results are seasonally adjusted.  A description of the poll’s methodology and sample characteristics can be found here. This is the fourth in a series of six posts highlighting results for the 1st quarter of 2023.  See previous post on plans to buy and new vs. existing preferences, and housing availability. Related ‹ Housing Share of GDP Lower in the First Quarter of 2023Tags: housing affordability, housing economics, housing trends report

Housing Affordability Expectations Improve2023-04-28T09:19:17-05:00

Popularity of New Homes Stalls

2023-04-27T15:20:44-05:00

By Rose Quint on April 26, 2023 • Interest for new home construction was essentially unchanged between the final quarter of 2022 and the first quarter of 2023, as the share of prospective buyers looking to buy a newly built home barely edged from 20% to 21%. Meanwhile, the share interested in existing homes dropped from 39% to 37% during this period, while the share with no particular preference edged from 41% to 42%. Interest for new homes changed little from the final quarter of 2022 to the first quarter of 2023 in all regions except the West, where the share rose from 21% to 27%. In the Midwest, the share stayed flat at 15%, while in both the Northeast and South, the share of buyers interested in new construction edged up from 20% to 22% during this period. * Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets. The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult. Results are seasonally adjusted. A description of the poll’s methodology and sample characteristics can be found here. This is the second in a series of six posts highlighting results for the 1st quarter of 2023. See previous post on plans to buy. Related ‹ March New Home Sales Jump on Lower Rates and Tight Existing Home SupplyShare of FHA-Backed New Home Sales Climbs in Q1 2023 ›Tags: housing economics, housing trends report

Popularity of New Homes Stalls2023-04-27T15:20:44-05:00

Materials Remain Builders’ Top Challenge, but Inflation and Interest Rates are Threatening

2023-02-13T09:19:33-06:00

By Ashok Chaluvadi on February 13, 2023 • The price and availability of building materials again topped the list of problems builders faced last year, while interest rates (along with general inflation and negative media reports) moved considerably up the list.  According to special questions on the January 2023 survey for the NAHB/Wells Fargo Housing Market Index, building material prices were a significant issue for 96% of builders in 2022. The second most widespread problem in 2022 was availability/time it takes to obtain building materials, cited by 86% of builders.  These were the same two problems that topped the list in 2021.  Cost and availability of labor has also been a relatively widespread problem, reported as a significant by 82% of builders in 2021 and 85% in 2022, a result that is not surprising given the large number of unfilled job openings in the construction industry. Compared to 2021, some of the problems became significantly more widespread in 2022. High interest rates were a problem for only 2% of builders in 2021, but this increased to 66% in 2022. Rising inflation in the US economy was a significant problem for 63% of builders in 2021, compared to 85% in 2022.  And 26 percent of builders said negative media reports making buyers cautious was a significant problem in 2021, compared to 55 percent in 2021. Even more builders—a full 93%—expect high interest rates to be a problem in 2023, up strongly from the 66% who said it was a problem in 2022.  Moreover, both the current and expected numbers were much higher in the recent survey than at any time in the 2011-2021 span. Compared to the supply-side problems of materials and labor, problems attracting buyers have not been as widespread, but builders expect many of them to become more of a problem in 2023. Negative media reports making buyers caution was a significant problem for 55% of builders in 2022, but 79% expect them to be a problem in 2023. Buyers expecting prices or interest rates to decline if they wait was a significant problem for 49% of builders in 2022, compared to 80% who expected it to be an issue in 2023. Concern about employment/economic situation was a problem for only 41% of builders in 2022, but 73% expect it to be a problem in 2023. Gridlock/uncertainty in Washington making buyers cautious was a significant problem for 38% of builders in 2022, compared to 54% who expected it to be a problem in 2023. Finally, buyers unable to sell their existing homes was a significant problem for only 13% of builders in 2022, but 52% expect it to be a problem in 2023. For additional details, including a complete history for each reported and expected problem listed in the survey, please consult the full HMI January2023 Special Survey REPORT. Related ‹ Loan Demand Declines as Credit Standards Tighten in Q4 2022Tags: Building Materials, economics, eye on the economy, home building, housing trends report, inflation, interest rates, single-family

Materials Remain Builders’ Top Challenge, but Inflation and Interest Rates are Threatening2023-02-13T09:19:33-06:00

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