5 ways homebuyers view the real estate market
August 28, 2019 10:28 AM
Consumer sentiments on housing help signal what mortgage lenders can expect for the market, and a second quarter National Association of Home Builders report suggests activity may not come in so hot.
Prospective homebuyers surveyed by NAHB expressed concerns about making a purchase: Only 20% of house hunters expect their search to get easier in the months to come, and an even smaller share plan to buy a house within a year. Some report seeing more inventory hit the market, but the highest share by region is in the South — at only 30%.
From perspectives on purchase difficulty to available supply, here's a look at five ways homebuyers view the housing market.
Prospective homebuyers surveyed by NAHB expressed concerns about making a purchase: Only 20% of house hunters expect their search to get easier in the months to come, and an even smaller share plan to buy a house within a year. Some report seeing more inventory hit the market, but the highest share by region is in the South — at only 30%.
From perspectives on purchase difficulty to available supply, here's a look at five ways homebuyers view the housing market.
Low expectations
Consumers have little faith their home shopping experience will get any easier. About 67% of prospective homebuyers expect their search to get harder or stay the same in the coming months, with only 20% claiming it'll get better. While this doesn't show much optimism toward making a purchase, it could also suggest consumers won't be waiting around for a better outcome before pulling the trigger.
Same old supply
Homebuyers aren't noting much relief from recent years of tight inventory. About 59% of shoppers reported seeing fewer or the same number of homes on the market, while only 27% claimed there were more houses available in the second quarter. Under two years ago in 4Q17, 38% of consumers saw more options on the market.
Few prospects
Only 12% of those surveyed are planning to make a house purchase within the next 12 months, a share chopped in half since the close of 2017. By generation, 17% of millennials plan to buy within a year, followed by 13% of Generation Xers, 7% of baby boomers and 3% of seniors.
Targeting a type
In terms of housing selection, prospective buyers are seeking out an existing home over a new one. Likely due to higher home values for new properties, particularly at a time when house prices are already elevated. About 41% overall said they're searching for an existing home, 40% claimed they'd take either new or existing and 19% were only looking to buy a new house. Of all generations, baby boomers are most likely to be looking for an existing home, while millennials are most likely to want new.
Limited options
While consumers may be searching for homes, their options are limited; about 80% of homebuyers could afford fewer than half the houses on the market in the second quarter. This means only 20% of house shoppers can look at half (or more) of the homes for sale. Those in the Northeast can afford more than other regions, but not by much.
