Buying a home is a mark of the American Dream—but even though the desire exists, realizing it is a struggle, according to the Aspiring Home Buyers Profile recently released by the National Association of REALTORS® (NAR).
Homebuyers are hopeful, however. Demand is ever-increasing, and, of aspiring homeowners, the majority do want to own. In 2017, approximately one-quarter (and as much as 32 percent) of aspiring homeowners identified their motivators for purchase as children, marriage and/or retirement, the Profile reveals. A similar share (26-30 percent) indicated they would buy if their finances improved.
Less motivating is a raise in rents, the Profile shows. Despite 51 percent of renters anticipating their rent will rise, 42 percent would not move. Twenty-five percent would find a less pricey rental. Just 15 percent would make the move to own.
Affordability is the obstacle—and according to Lawrence Yun, chief economist at NAR, aspiring homeowners at the lower-end of the market have the worst of it. At the close of 2017, in fact, 56 percent of aspiring homeowners did not have the means to purchase, while the amount of aspiring homeowners who believed it is a good time to buy declined (down to 58 percent from 62 percent).
“A tug-of-war continues to take place in many markets throughout the country, where consistently solid job creation is fueling demand, but the lack of supply is creating affordability constraints that are ultimately pulling aspiring buyers further away from owning,” says Yun. “These extremely frustrating conditions continue to be most apparent at the lower end of the market, which is why the overall share of first-time buyers remains well below where it should be given the strength of the job market and economy.
“Housing demand in 2018 will be fueled by more millennials finally deciding to marry and have kids and the expectations that solid job growth and the strengthening economy will push incomes higher,” Yun says. “However, with prices and mortgage rates also expected to increase, affordability pressures will persist. That is why it is critical for much of the country to start seeing a significant hike in new and existing housing supply. Otherwise, many would-be first-time buyers will be forced to continue renting and not reach their dream of being a homeowner.”
The Aspiring Home Buyers Profile is based on findings from NAR’s 2017 Housing Opportunities and Market Experience (HOME) surveys.
For more information, please visit www.nar.realtor.