Washington, D.C.—Increased activity in the housing market in the wake of COVID-19, combined with rising housing prices, has hampered prospective buyers’ outlook on the housing market and their ability to buy a home, according to the National Association of Home Builders (NAHB).
NAHB’s Housing Trends Report (HTR) found that 64% of prospective home buyers in the second quarter of 2021 expect that finding the right home will be harder in the months ahead, compared to 54% in the last quarter of 2020. Expectations that finding a home would be easier in the months ahead dropped in all four regions between the first quarter of 2020 and the second quarter of 2021:
- Northeast: 44% thought it would be easier to find a home compared to 33% in 2021
- Midwest: 23% vs. 19%
- South: 32% vs. 29%
- West: 40% vs. 25%
Buyers across these same regions also report seeing a decrease in the number of homes for sale over the same time frame:
- Northeast: 48% seeing more homes for sale compared to 43% in 2021
- Midwest: 30% vs. 28%
- South: 37% vs. 33%
- West: 42% vs. 27%
Although inventory is expected to improve—with the number of unsold homes rising 3.3% to 1.25 million from May to June 2021—buyers are still hampered with rising home prices. The share of prospective buyers who can only afford less than half the homes in their markets rose to 71% in second quarter of 2021, up from 65% in the first quarter of 2021 and 63% in the final quarter of 2020.
Housing affordability struggles persist in all four regions:
- Northeast: 51% of prospective buyers can only afford less than half the homes in their markets in the final quarter of 2020 compared to 66% in the second quarter of 2021
- Midwest: 74% vs. 83% in 2021
- South: 68% vs. 75%
- West: 61% vs. 70%