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Buyers’ View of Inventory, Affordability Dampened

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2021 was hard on home buyers, according to National Association of Home Builders. In the second year of the pandemic, their view of housing availability and affordability took a tumble, as the shares of buyers who expected their home search to get easier or harder diverged in the fourth quarter of 2020. That’s when 54% of buyers expected their search to get harder and 37% expected it to get easier, according to Rose Quint, NAHB’s assistant vice president for survey research. By the third quarter of 2021, the share of buyers who expected finding a home to get harder had increased to 66%, while the share of those who expected an easier time fell to 25%.

“This worsening in buyers’ perceptions of inventory accurately reflects the scarcity of homes for-sale—particularly existing homes—during 2021,” Quint wrote in a blog post.

Buyers’ perceptions of availability fell in every region except the West, where optimism about the ease of home searches improved from 40% to 35%.

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Buyers have a similarly dim view about affordability, as 73% of buyers estimated they could afford fewer than half of the homes that were available in the third quarter of 2021, increasing every quarter from 63% in Q4 2020, according to Quint.

“This steady increase is evidence that double-digit increases in home prices have eroded the positive impact low interest rates had on buyers’ perceptions of housing affordability throughout 2020,” she said.

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