NAHB: Homebuyer Competition Decreases; Share of Active Buyers UpAugust 5th, 2022 by Editor
The National Association of Homebuilders (NAHB) Economics team created the Housing Trends Report (HTR) — a research product with the goal of measuring prospective homebuyers’ perceptions about the availability and affordability of homes for-sale in their markets — and, according to the results from the latest HTR, the share of prospective home buyers who are actively engaged in the process to buy a home rose to 49% in the second quarter of 2022, after declining for three straight quarters.
The pivot is likely driven by less competition, as many would-be buyers have exited the market in recent months because of rising interest rates, the NAHB says.
Results reportedly show that, except for the South, the share of prospective buyers actively searching for a home rose in every region between the first and second quarters of 2022. In the Northeast, that growth went from 50% in the first quarter to 54% in the second quarter. The Midwest saw growth from 40% in the first quarter to 51% in the second quarter, while the West went from 46% in the first quarter to 57% in the second quarter.
The NAHB reports that the HTR reflects housing availability expectations are on the rise as well. After falling steadily for five quarters, 22% now expect their home search to get easier in the months ahead, that’s up from 17% to in the first quarter of 2022.
Affordability expectations also improved in the second quarter of 2022 — for the first time since 2020. The share of prospective buyers able to afford at least half of the homes available rose from 19% to 23%. However, the NAHB points to a likely reason being the exit of first-time home buyers from the market is also tilting the composition of prospective buyers toward wealthier buyers better able to absorb recent increases in mortgage rates.
CLICK HERE to learn more about the second quarter 2022 data.