Home sellers have been having a heyday, and buyers are showing signs that they’re over it. Nearly seven out of 10 buyers spent three months trying unsuccessfully to find a home, according to the National Association of Home Builders‘ Housing Trends Report.
For the first time since the organization began surveying prospective and active home shoppers, the top obstacle to buyers of new homes is other buyers. Forty percent of buyers in the last quarter of 2020 were outbid, NAHB found.
While over half of buyers say they will continue looking until the right home becomes available, the share of frustrated buyers who are ready to give up and wait until later jumped from 16% at the end of 2019 to 28% at the end of last year.
“Importantly, historical data show a steadily rising trend in the share of long-term searchers likely to quit looking for a home until next year or later, as the latest increase marks the fourth year-over-year rise in this metric,” Rose Quint, assistant vice president for survey research at NAHB, wrote in a blog post.
Buyers’ main obstacle has consistently been finding a home in their price range, a challenge that remains for a third of today’s buyers, compared to 44% in the last quarter of 2019.
Last year was a remarkable one for home sales, leading to a nearly 19% increase over 2019, according to NAHB. Wanting to lock in low mortgage rates, and the pandemic pushing people into larger homes and in the suburbs, drove the increase in active buyers, Quint said.
Millennials are highly engaged shoppers, with nearly two-thirds of millennials saying they were actively looking for a new home in the fourth quarter, up from 46% the year before. Gen X buyers also jumped into the market with gusto, as 57% of Gen Xers were actively shopping, compared to 43% last year.
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Danielle Andrus was previously the managing editor for Colorado Builder, and is currently Editor for the Journal of Financial Planning.