The National Association of Homebuilders (NAHB) [1]reports just 43% of Americans were actively looking to buy a home during Q4 2019—a stark decline from the prior years’ 54%.
Just 11% of Americans considered buying a home during the quarter.
“This finding suggests that mortgage interest rates steadily below 4.0% in recent months have not motivated more prospective buyers to get started trying to find a home to buy,’ the NAHB says.
The share of buyers actively seeking a home fell from 46% in Q1 2019 to the reported rate of 43%. That share dipped as low as 41% during Q2 2019.
Millennials are the generation seeking to buy homes the most, with 46% reportedly actively searching. They were followed by Gen X buyers (43%), Gen Z buyers (41%), and Baby Boomers (37%).
The Northeast was home to the most active homeseekers at 49%.
Those seeking a home are needing to clear off their calendar, as the report states 60% of engaged buyers spent at least three months searching—and increase from the 58% last year.
This is the fourth consecutive annual gain in the share of buyers who have spent more than three months looking to buy a home.
Another issue for prospective buyers is price, as the NAHB also says that 44% of home searchers can’t find a house they can afford. [2]
Of those surveyed who were having issues finding a home, 51% said they will keep looking for the “right” home in the same location, 39% will expand their search, 19% will accept a smaller or older home, and 16% might buy a more expensive home.
The share of prospective buyers who will “give up” looking if they can’t find a home after at least three months of searching rose 1 percentage point to 16% in Q4 2019—the second-highest reading since Q3 2018.
CoreLogic reported recently [3]that home prices rose 4% annually in December 2019 and are expected to increase 5.2% over the next year.
Price appreciation averaged 3.6% for 2019, which is a considerable drop from 2018’s average of 5.8%. CoreLogic projects average growth for 2020 to be 4.6%.