Buyers’ Outlook on Housing Availability and Affordability Declines

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The increased activity in the housing market in the wake of COVID-19, combined with rising housing prices, has hampered prospective buyers’ outlook on the housing market and their ability to buy a home.

According to NAHB’s Housing Trends Report (HTR), 64% of prospective home buyers in the second quarter of 2021 expect that finding the right home will be harder in the months ahead, compared to 54% in the last quarter of 2020. Expectations that finding a home would be easier in the months ahead dropped in all four regions between the first quarter of 2020 and the second quarter of 2021:

Northeast: 44% who thought it would be easier to find a home compared to 33%
Midwest: 23% to 19%
South: 32% to 29%
West: 40% to 25%

Buyers across these same regions are also reporting seeing a decrease in the number of homes for sale over the same time frame:

Northeast: 48% seeing more homes for sale compared to 43%
Midwest: 30% to 28%
South: 37% to 33%
West: 42% to 27%

Although inventory is expected to improve — with the number of unsold homes rising 3.3% to 1.25 million from May to June 2021 — buyers are still hampered with rising home prices. The share of prospective buyers who can only afford less than half the homes in their markets rose to 71% in second quarter of 2021, up from 65% in the first quarter of 2021 and 63% in the final quarter of 2020.

Affordability struggles persist in all four regions:

Northeast: 51% of prospective buyers who can only afford less than half the homes in their markets in the final quarter of 2020 compared to 66% in the second quarter of 2021
Midwest: 74% to 83%
South: 68% to 75%
West: 61% to 70%

Rose Quint, NAHB assistant vice president for survey research, provides more insight in this post and this post from Eye on Housing.

*Note: All articles have been redistributed from NAHBnow.com*