As revealed in a previous post, 53% of buyers actively searching for a home to buy in the first quarter of 2019 have been looking – unsuccessfully – for three months or longer. Why is it taking these buyers that long to pull the trigger? The most important reason is they can’t find a home at a price they can afford (46%), followed by not being able to find a home in the neighborhood of their choice (40%), and not finding a home with the features they want (38%). Comparing these findings to similar data from a year earlier shows a 5-point drop in the share of buyers who consider high prices their biggest barrier to homeownership. Future data will determine if there is a trend toward fewer buyers considering high prices their biggest barrier to homeownership.
The final question in NAHB’s Housing Trends Report (HTR) asks these veteran house hunters, who have been actively searching for a home for at least three months, about their future plans if the right home remains elusive in the months ahead:
- 56% will continue looking for the ‘right’ home in the same preferred location,
- 41% will expand the search area,
- 30% is willing to accept a smaller/older home,
- 21% might buy a more expensive home
Giving up on homeownership is the least likely outcome, as only 14% will stop trying to find a home. Future polls will determine how this propensity to postpone homeownership will change, if at all, given the changing dynamics (e.g. interest rates, home prices) of the housing market.
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 here. This is the fifth and final in a series of posts highlighting results for the first quarter of 2019. See previous posts on plans to buy, housing availability, and housing affordability, and active buyers.
This is false, the primary barrier to home ownership is the upfront funds required for the down payment and closing costs. This has always been the case and always will be. Those who ignore this do so at their own peril. I sold and supervised sales with interest rates between 7% and 18% over a 30 year career and know something about dealing with affordability issues.
The amount of upfront funds required for the down payment is directly related to the purchase price of a home. I took 6th grade economics and know something about simple things.
The point you missed is that young people have an ever increasing problem saving money. Other than FHA, most lenders prohibit family members from gifting the down payment and closing costs. While price does affect the amount of up-front cash required, it is the difficulty in saving that bars most from buying.