At the end of 2017, 27% of prospective home buyers thought their house hunt would get easier in the months ahead, but by the end of last year, that number had dropped to 19%. Over the same period of time, the share of people saying they planned to buy a home in the next 12 months fell from 24% to 13%.
Those two measurements characterize what might be the housing market’s biggest headwind right now. There’s a litany of hurdles for any would-be buyer to overcome, from rising mortgage rates to a lack of affordable supply. But taken together, they may make it too hard for many people to buy a home.
The numbers come from the National Association of Home Builders’ Housing Trends Report, a series of quarterly polls of a sizable number of American adults — 17,000 in the fourth quarter of 2018.
It’s worth noting that there is still sturdy demand for housing, and specifically for ownership. For example, as mortgage rates have fallen, mortgage applications have surged.
But rates are just one piece of the puzzle, as MarketWatch has noted in the past. In a blog post analyzing some of the survey findings, NAHB blamed the overall lack of affordability for many Americans deciding to give up.
The median sales price of a new home in November was $302,400, 12% lower than year-ago levels. And there were precisely 6.0 months’ worth of inventory, the exact measure that has generally determined a market evenly balanced between supply and demand.
For already built homes, the median sales price was $253,600, about 3% higher than a year ago.
That may not tell the whole story, though. There’s still a crying lack of inventory in the market, for one thing. Mortgage lending is still tight – and perceived that way, which may keep some consumers from even trying to qualify.
At some point, homeownership may simply feel too difficult for enough Americans that it becomes noticeable in the market. At the same time that fewer survey respondents thought it would get easier, more – nearly three-quarters – said it would get more difficult.
For all these reasons, the upcoming spring selling season will be watched very closely.
Author: Andrea Riquier
Source: MarketWatch | It’s not getting any easier to buy a house, and more Americans may just give up