Eye On Housing
According to the Housing Trends Report (HTR)* for the third quarter of 2018, only 13% of adults are planning to purchase a home in the next 12 months. Most of these prospective buyers (58%) report this is the first time in their lives they would be buying a home.
Planning to Buy a Home in Next 12 Months: Prospective Home Buyers
(Percent of Respondents)
First-time Buyer Share
(Percent of Prospective Home Buyers)
The intention to buy is inversely related to age: whereas 19% of Millennials have plans to purchase a home in the next year, the share falls to 13% among Gen X’ers, 7% among Boomers, and 3% among Seniors.
These results are not surprising, given that mobility rates decline significantly with age: according to the Census Bureau’s 2017 Current Population Survey, 18% of those under 40 years of age moved in the previous year, compared to 9% of those 40 to 49, 6% of those 50 to 69, and 3% of those 70 or older.
Planning to Buy Home in Next 12 Months by Generation
(Percent of Respondents)
Most of the 19% of Millennials planning a home purchase are first-time home buyers (75 percent). Among Gen X’ers and Boomers, 48 percent and 20 percent, respectively, are attempting home ownership for the first time. Since only 3% of Seniors reported plans to buy a home, not enough data are available to reliably estimate the share that would be first-timers.
First-time Buyer Share by Generation
(Percent of Prospective Home Buyers)
In terms of the type of home these prospective home buyers are interested in, 44% are looking to buy an existing home, 18% a newly-built home, and 38% are looking for either type.
* The Housing Trends Report (HTR) is 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 not seasonally adjusted due to the short time horizon of the series, and therefore caution is advised when interpreting trends or comparing time periods. A description of the poll’s methodology and sample characteristics can be found here This is the first in a series of four posts highlighting results for the third quarter of 2018.
This is interesting information, except for the fact that the percentages are not related to an actual number of prospects. Why not share how many prospective buyers are actually interested by offering us a total number of adults, or totals for each market segment … or even better, just actual numbers of prospects? I would guess 13% of all adults is a pretty impressive number of shoppers!
Results in this post are based on a national sample of 20,051 adults. Because the sample is designed to represent the full universe of US adults, we can make inferences such as the 13% statistic mentioned here. It would be inappropriate to calculate 13% of 20,051 to come up with a total number of prospects. As of 2017, there were 252 million people above age 18 in the US.
Agreed … calculating 13% of your sample would not be representative of anything meaningful in terms of the total number of prospects. On the other hand, 13% of 252M adults amounts to more than 30M adults who plan to buy a home in the next 12 months. Of course, a good percentage of these are couples or multi-gen households, so if that data was available in your sample, we could come to a more meaningful estimate of a total number of prospects.
It’s possible that my perception is not typical, but the headline of this article seemed to indicate this information as bad news.
How does 13% compare to previous years? Is this a downturn in interest?
Again, it would seem that 30M prospects interested in buying homes might be a very high level of interest under current market conditions. Factoring single occupant households into the mix, could this represent more than 20M total prospective households interested in buying?
With 5.51M existing home sales and another 608K new home sales reported for 2017, would a prospective market interested in 20M home purchases for 2019 be representative of a downturn?
I’m just curious as I try to understand what this information means to housing.
Unfortunately, our series is too young to be able to provide historical perspective. As mentioned in the technical note, data are not seasonally adjusted yet and therefore no historical comparisons are appropriate. We’ll have to wait to accumulate more data to speak of ups and downs.