An earlier post revealed that 66% of buyers who were actively engaged in the process of finding a home in the second quarter of 2021 have spent upwards of 3 months searching for a home without success. For two quarters recently (Q4 2020 and Q1 2021), ‘getting outbid by other offers’ was the most common reason these long-time searchers could not buy a home. But the top reason changed in the second quarter of 2021, when once again, the inability to find an affordably priced home became the primary reason (39%) active buyers couldn’t pull the trigger.
When asked what they are most likely to do next if still unable to find a home in the next few months, 43% of active buyers searching for 3+ months will expand their search area (up from 37% in the final quarter of 2020). On the other hand, 42% will continue looking for the ‘right’ home in the same location (down from 50% in the final quarter of 2020). More buyers expanding the area where they are searching for a home is linked to the increasing ability of many workers to work remotely from home, thus severing the need to be in close proximity to office space.
Meanwhile, after reaching a series high of 28% in the final quarter of 2020, the share who are likely to give up their home search until next year or later has declined for two straight quarters, falling to 20% by the second quarter of 2021.
* All national and regional series in the HTR were seasonally adjusted for the first time in the second quarter of 2021. As a result, all data prior to this quarter have changed, as they now reflect the seasonal adjustments. Moving forward, non-seasonally adjusted data will no longer be published.
**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 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 highlighting results for the second quarter of 2021.
While buyers generally do use price while shopping to determine what they will look at, most buy based on the initial investment required and the monthly payment. Few are able to correlate these with the price. Where pricing is an issue, I recommend builders seek to provide the best financing terms available and stress the investment and payment factors in their marketing. Having sold real estate when interest rates where 18%, I can verify this will produce sales.