The amount of adults planning to buy a home declined for the second consecutive year. According to a National Association of Home Buyers (NAHB) [1] report, in Q1 2019, 13% of adults said they planned to purchase a home within the next year.
That represents a 4% drop from this time last year, when the rate was 17%. Additional information from the latest Housing Trends Report (HTR) show that 60% of prospective homebuyers said they had never owned a home in Q1 2019, which is a 6% increase from last year.
The NAHB reports the 13% share of adults planning to buy a home has remained steady since Q2 2018 when it fell from 14% the prior quarter. The amount of adults planning to buy a home peaked at 24% in Q4 2017.
Age and the intention to buy are closely related, the report states, finding that, while 20% of millennials plan to purchase a home in the next year, only 15% of Gen X’ers, 7% of Baby Boomers, and 3% of seniors plan to buy a home.
People living in the South are 16% more likely to planning a home purchase, which is the highest of any region in the nation.
The report added that 41% of prospective homebuyers are interested in an existing home, with 22% preferring a new home. The remaining 38% are seeking both.
Home affordability continues to be a factor, as First American Financial Corportation’s February Real Housing Price Index [2] recently reported that real home prices increased 2.9% year-over-year. Despite the increase, First American also stated that household income has increased 2.8% since 2018, and that real house prices are 14% less expensive than they were in January 2000.
First American also released a study [3], “Why Everything You Know About First-Time Home Buyer Affordability Is Wrong [4],” which revealed that fewer than half of the markets studied were deemed affordable. First American added that many first time homebuyers should avoid some of the traditional measures of home affordability, noting that affordability goes beyond buying power.
Additionally, First American notes that homes are already affordable for approximately two-thirds of Americans because 64.8 percent of Americans own homes, meaning any affordability metric to include existing homeowners would be misleading.