Outlook for homeownership dims
Fewer Americans aspire to own a home, according to research by the National Association of Home Builders. The group's latest Housing Trends Report showed the share of adults planning a home purchase within a year slipped to 16% for the third quarter of 2021, reversing five consecutive quarters on rising numbers.
The metric for adults planning a home purchase within a year hit a low of 10% in the first quarter of 2020 and peaked at 17% in Q2 of 2021.
On a more positive note, the share of prospective first-time purchasers rose for a fourth consecutive quarter, up to 65%. That marked an increase from the year-earlier figure of 56%.
A comparison of regions showed the West was the only region to notch a quarter-to-quarter increase (from 17% to 19%) in home buying intentions. The Northeast saw its share of adults with plans to buy a home plummet from 20% in the 2nd quarter of 2021 to 14% in this year's 3rd quarter, while both the Midwest (at 13%) and the South (at 17%) were unchanged.
Millennials had the largest increase among those planning a home purchase, growing from 22% to 29%, followed by Gen Z buyers, which saw a gain from 14% to 20%. Gen Z and Boomers had little to no change during the most recent quarters.
NAHB found that more than half or prospective buyers in every region are first-timers, led by those in the Midwest, which reported at record 69% were buying for the first time. The Northeast and South reported 65% were first-time buyers, with the West lagging at 61%.
Availability expectations have changed significantly since the beginning of 2018 when the Housing Trends series started. At that time, only 16% of buyers expected easier availability for a home. The optimism soared to 36% by the 4th quarter of 2020 (during the pandemic). Now, two-thirds of prospective buyers (66%) expect finding the right home will be harder or unchanged from previous periods. Two-thirds of active buyers say they are spending at least three months searching for a home.
The Housing Trends Report is produced quarterly by the NAHB Economics team to track changes in prospective home buyers' perceptions about the availability and affordability of homes in their markets. The seasonally adjusted data are derived from national polls of a representative sampling of American adults.