Housing Demand Flattens as 1st-Time Buyers Retreat

The share of adults planning a home purchase within a year stood at 13% in the second quarter of 2022, unchanged from the previous quarter, but lower than a year earlier (17%).  The leveled reading suggests that, after shrinking for the past three quarters, the pool of potential home buyers may have stabilized.

Part of the reason housing demand has decelerated is that 1st-time home buyers continue to retreat:  their share of all prospective buyers peaked at 65% in the third quarter of 2021, followed by three straight declines to reach the current 59% – its lowest point in almost two years (56% in the third quarter of 2020).

The change in housing demand between the first and second quarters of 2022 was mixed across regions.  While slightly larger shares of adults had plans to buy a home in the South (13% to 15%) and West (14% to 16%), the shares were flat in the Northeast (12%) and Midwest (11%).

From their peak in 2021 to now, the share of buyers who are purchasing a home for the first time has fallen steadily in the Northeast (70% to 54%) and Midwest (69% to 54%).  In the West and South, the shares rose between the first and second quarters of 2022, but were still down from a year earlier.

** Results come from the Housing Trends Report (HTR) – 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 first in a series of six posts highlighting results for the 2nd quarter of 2022.

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