Eye On Housing
In the final quarter of 2018, 13% of adults reported plans to purchase a home within a year. A year earlier, in the final quarter of 2017, a significantly larger portion – 24% – had the same plans. This sharp decline in the share of prospective home buyers provides additional evidence that the erosion of housing affordability has become a serious concern for the housing market. The deterioration in affordability has been driven by several years of strong home price appreciation and interest rate increases throughout much of 2018.
Additional findings from the latest Housing Trends Report (HTR)* show that in the fourth quarter of 2018, 53% of prospective home buyers had never owned a home before. In comparison, a year earlier, 60% of buyers were first-timers.
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 22% of Millennials have plans to purchase a home in the next year, only 14% of Gen X’ers, 7% of Boomers, and 4% Seniors share that goal.
Planning to Buy Home in Next 12 Months by Generation
(Percent of Respondents)
Most of the 22% of Millennials planning a home purchase are first-time home buyers (77 percent). Among prospective Gen X and Boomer buyers, 47 percent and 28 percent, respectively, would be buying a home for the first time. Since only 4% 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, 42% would buy either a new or existing home, 40% are looking to buy an existing home, and 18% are looking only at newly-built units.
* 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 only year-over-year comparisons are statistically valid. A description of the poll’s methodology and sample characteristics can be found Sample Characteristics. This is the first in a series of five posts highlighting results for the fourth quarter of 2018.
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