High Home Prices Are Leading More Buyers To Give Up Home Search

2022-04-22T09:20:54-05:00

By Rose Quint on April 22, 2022 • An earlier post revealed that 67% of buyers who were actively engaged in the process of finding a home in the 1st quarter of 2022 have spent 3+ months searching for a home without success. By far, the most common reason these long-term searchers cite for not having bought by now is their inability to find an affordable home (48%).  In distant second place is their inability to find a desirable neighborhood (34%), followed by the inability to find a home with desirable features (31%), and being outbid by other buyers (29%). When asked what they are most likely to do next if still unable to find a home in the next few months, most (52%) active buyers searching for 3+ months said they will continue looking for the ‘right’ home in the same location.  Nineteen percent will buy a more expensive home (down from 26% a quarter earlier), and 20% will accept a smaller/older home (also down from 26%). Meanwhile, the share who plan to give up their home search until next year or later is showing a clear upward trend, rising from 20% in the 2nd quarter of 2021, to 22% in the third, 23% in the fourth, and now 25% in the first 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 post in a series of six posts highlighting results for the 1st quarter of 2022. See previous posts on plans to buy and new vs. existing preference, housing availability, and housing affordability. Related ‹ Fewer Prospective Buyers Are Actively Searching for a HomeTags: housing economics, housing trends report

High Home Prices Are Leading More Buyers To Give Up Home Search2022-04-22T09:20:54-05:00

Fewer Prospective Buyers Are Actively Searching for a Home

2022-04-22T09:21:35-05:00

By Rose Quint on April 22, 2022 • A growing segment of prospective home buyers aren’t moving past the planning stage.  At its peak in mid-2021, 61% were actively trying to find a home to buy.  Now, the share is back to pre-pandemic levels, at 46%.  This is clear evidence that higher mortgage rates and double-digit growth in home prices are discouraging a growing share of buyers from engaging in the purchase process. Fewer buyers in every region are actively searching for a home.  From peak to now, the share dropped in the Northeast (72% to 50%), Midwest (51% to 40%), South (58% to 48%), and West (72% to 46%). Of the buyers who are actively searching for a home to buy, most are spending 3+ months looking.  In the first quarter of 2022, 67% of active buyers had spent upwards of 3 months searching for a home.  Before the pandemic (between the first quarters of 2018 and 2020), fewer than 60% of active buyers shopped for a home for 3+ months. **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 2022. See previous posts on plans to buy and new vs. existing preference, housing availability, and housing affordability. Related ‹ Buyers Feeling Grim About Housing AffordabilityTags: housing economics, housing trends report

Fewer Prospective Buyers Are Actively Searching for a Home2022-04-22T09:21:35-05:00

Buyers Feeling Grim About Housing Affordability

2022-04-21T09:18:30-05:00

By Rose Quint on April 21, 2022 • Buyers’ expectations for housing affordability continue to sour.  In the first quarter of 2022, 81% said they could afford less than half the homes for-sale in their markets – the highest share since before the pandemic.  At its lowest point in the 4th quarter of 2020, 63% of buyers expected to afford

Buyers Feeling Grim About Housing Affordability2022-04-21T09:18:30-05:00

High Building Materials Prices Erode Preference for New Construction

2022-04-20T08:17:54-05:00

By Rose Quint on April 20, 2022 • Preference for newly constructed homes skyrocketed in 2020, as buyers looked for homes with more square footage and amenities in which to work remotely, school children, exercise, etc.  By the fourth quarter of 2020, 42% of prospective buyers preferred new construction.  Since then, however, rising new home prices (driven by a 31% increase in the cost of building materials) have eroded the preference for new homes.  By the first quarter of 2022, and after falling for five straight quarters, the share of buyers looking for new construction has returned to pre-pandemic levels:  19%. New construction has lost preference in every region of the country.  From peak to now, the share of buyers who’d prefer a newly-built home dropped in the Northeast (60% to 19%), Midwest (27% to 14%), South (33% to 21%), and West (51% to 24%). ** Results come from the Housing Trends Report – 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 2022.  Related ‹ Housing Demand Is SofteningTags: housing economics, housing trends report

High Building Materials Prices Erode Preference for New Construction2022-04-20T08:17:54-05:00

Housing Demand Is Softening

2022-04-20T08:18:41-05:00

By Rose Quint on April 20, 2022 • The share of adults planning a home purchase within a year fell for a third straight quarter in the first three months of 2022, down to 13%.  The last time fewer American adults intended to buy a home was in the second quarter of 2020 (11%).  The decline is evidence that the COVID-induced boost to housing demand is past its peak and is now softening. Part of the reason housing demand is moderating is that 1st-time home buyers are taking a step back:  their share of prospective buyers has fallen for two consecutive quarters, from 65% in the third quarter of 2021 to 60% in the first quarter of 2022 – roughly back to the same level as prior to the pandemic. Every region is experiencing a slowing down in housing demand: the share of adults with plans to buy a home in the first quarter of 2022 was lower (or flat) than every quarter in 2021 in all four Census regions. After peaking in 2021, the share of buyers who are purchasing a home for the first time is now lower in every region of the country.  From peak to now, the share fell in the Northeast (70% to 62%), Midwest (69% to 56%), South (67% to 61%), and West (65% to 55%). ** Results come from the Housing Trends Report – 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 first in a series of six posts highlighting results for the 1st quarter of 2022. Related ‹ Single-Family Permits Weaken in MarchTags: housing economics, housing trends report

Housing Demand Is Softening2022-04-20T08:18:41-05:00

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