For some home buyers, housing affordability has improved. According to the Housing Trends Report for the first quarter of 2021, 35% of buyers report being able to afford half or more of the homes available for-sale in their markets. A year earlier, that share was 23%. The increase is an indication that still relatively low mortgage rates continue to have a stronger impact on some buyers’ perceptions of affordability than rising home prices. Nonetheless, a majority of buyers (65%) do report being able to afford fewer than half the homes available in their markets, but that share is down from 78% a year earlier.
Millennials report the most improvement in housing affordability perceptions in the last year. Between the first quarters of 2020 and 2021, the share of buyers of this generation who can afford half or more of the homes available doubled (22% to 44%), while changing little among the other generations. Across regions, the share of buyers who can afford half or more of the homes more than doubled in the Northeast (19% to 46%) and rose significantly in the West (20% to 37%).
* The Housing Trends Report 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 fourth in a series of six posts highlighting results for the first quarter of 2021. See previous posts on plans to buy, new vs. existing preference, and housing availability.