In the third quarter of 2021, 73% of buyers estimate they can afford less than half the homes available for-sale in their markets. That share is up from 71% the prior quarter, 65% the quarter before that, and 63% in the final quarter of 2020. This steady increase is evidence that double-digit increases in home prices have eroded the positive impact low interest rates had on buyers’ perceptions of housing affordability throughout 2020.
Between the second and third quarters of 2021, affordability expectations worsened in the Northeast and South, as the shares able to afford less than half the homes available rose from 66% to 69% and from 75% to 76%, respectively. When measured from the final quarter of 2020 to now, however, buyers’ perceptions of affordability have deteriorated in every region of the US.
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 fourth 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, and housing availability.