Americans have a growing desire to become homeowners, according to the latest Housing Trends Report, a research product created by economists at the National Association of Home Builders (NAHB).
Researchers reported 17% of American adults are considering a home purchase within a year. That seasonally-adjusted share for the 2nd quarter of 2021 marked the fifth consecutive quarter of increases.
Of the prospective buyers in the latest survey, about two-thirds (64%) are first-time buyers, the highest share in the history of the series.
All regions of the country saw a significant increase in the share of adults planning a home purchase during the 2nd quarter when compared to the 1st quarter of 2021. The Northeast had the largest increase, jumping from 8% to 20%. Both the West and South reported increases from 11% to 17%, while the Midwest rose from 8% to 13%.
The NAHB report measures prospective homebuyers’ perceptions about the availability and affordability of homes for-sale in their markets. Researchers compare responses by region and by generation.
Survey participants are also asked whether they are looking to buy a newly built home or an existing home.
When asked about availability expectations, 64% of respondents believe finding the right home will be harder or not change much. Expectations that housing availability will ease up declined in all regions. A comparison of generations revealed only Millennials expect improved availability, rising from 26% a year ago to 34% during 2nd quarter 2021.
Buyers’ perceptions about inventory “correctly reflects the scarcity of homes available on the market in the first half of 2021.” The share seeing fewer or the same number of homes on the market in Q221 increased to 63%.
NAHB also reported affordability expectations have worsened in 2021. By the end of this year’s second quarter, 71% of respondents said they could afford less than half the homes in their markets. The decline was consistent across all regions of the U.S.
On a more encouraging note, more prospective buyers have become active buyers, reaching 61% in Q221. The report attributes the increase to low mortgage rates, a desire for more space, and a desire for a new location in the suburbs/exurbs.
House-hunters acknowledge it is taking longer to search for a home. In Q419, 57% of buyers engaged in the purchase process said they had spent 3+ months looking for a home. By the end of June that share climbed to 66%.
Researchers asked those who had been searching for a least three months why they had not been successful. The most common reason shoppers cited was the inability to find an affordably priced home (39%). Being outbid, being unable to find a home with the desired features, and the inability to find a home in the preferred neighborhood were other reasons they listed.
Asked about their next steps, 42% of active buyers who had searched for at least three months said they will continue looking for the ‘right’ home in their preferred location. Nearly one-fourth (24%) said they will buy a more expensive home. Others indicated they will expand their search area, accept a smaller/older home, or postpone trying to purchase a home until next year or later.
The Housing Trends Report, conducted quarterly, derives data from national polls of representative samples of American adults. The respondents represent the U.S. adult population in terms of age, gender, region, race/ethnicity, and education.