Home Prices Starting to Discourage a Segment of Home Buyers

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After growing steadily for six straight quarters, and peaking at 61% in the second quarter of 2021, the share of prospective buyers actively trying to find a home to buy declined to 57% in the third quarter.  This is an indication that fast-growing home prices have begun to discourage a segment of potential buyers from getting past the planning stage.

The share of prospective buyers who are actively searching for a home declined in three of the four Census regions between the second and third quarters of 2021:  in the South, from 58% to 51%; in the West, from 72% to 65%; and in the Northeast, from 66% to 65%.  The share was flat in the Midwest, at 50%.

Most buyers actively engaged in the purchase process are spending long periods of time searching for a home.  During each of the first three quarters of 2021, 66% reported spending 3+ months looking.  Before COVID-19, in the final quarter of 2019, the share stood at 57%.

* 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 fifth in a series of six posts highlighting results for the third quarter of 2021. See previous posts on plans to buy, new vs. existing preference, housing availability, and housing affordability.



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