HOUSING TRENDS REPORT QUARTER 2, 2020eyeonhousing.org/wp-content/uploads/2020/07/HOUSING... ·...

HOUSING TRENDS REPORT

QUARTER 2, 2020 (Data Collected: June 16-28)

HOUSING TRENDS REPORT

The Housing Trends Report (HTR) measures

prospective home buyers’ perceptions about the

availability and affordability of homes for-sale in their

markets.

All data are derived from national polls of

representative samples of American adults

conducted for NAHB by Morning Consult. This report

is released quarterly to track changes in buyers’

perceptions over time.

Generation definitions:

o Gen Z*: Born 1997 to 2002.

o Millennial: Born 1981 to 1996.

o Gen X: Born 1965 to 1980.

o Boomer: Born 1946 to 1964.

Methodology:

The interviews were conducted online and the data were weighted to

approximate a target sample of adults based on age, educational

attainment, gender, race, and region. In qtr1’19, weights were

refined to better match the general US population and provide more

consistent distributions across demographic groups over time. These

new weights were applied retroactively to the entire series in order to

maintain comparability. In qtr3’19, Gen Z was incorporated into the

generational analysis for the first time.

* In 2020, Generation Z is constrained to end in the year 2002 because only adults 18 or older

can participate in the poll.

Results are not yet seasonally adjusted due to the short-time horizon of the series; therefore, only year-over-year comparisons are

statistically valid.

PLANNING TO BUY A HOME WITHIN 12 MONTHS

11% of respondents in Qtr2’20 are prospective home buyers

(planning to buy a home within 12 months), essentially

unchanged from a year earlier (12%). Put differently, COVID-

19 has had little impact on the propensity of Americans to want

to buy a home.

BY GENERATION: Millennials are the generation most likely to

want to buy a home (19%), even slightly higher than a year

earlier (17%).

* Gen Z data were not available in Quarter 2, 2019.

BY REGION: 13% of respondents in the West region are

prospective home buyers, about the same as a year earlier

(12%). In the Midwest, the share fell slightly, down to 9%.

24%

17%14% 13% 13% 13% 12% 12% 11% 10% 11%

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17%13%

7%

14%19%

12%

5%

Gen Z Millennials Gen X Boomers

Q219 Q220

*

10% 11% 12% 12%10% 9%12% 13%

Northeast Midwest South West

Q219 Q220

The rest of this report is based entirely on prospective home buyers, i.e. those planning to buy a home within the next 12 months.

1ST-TIME HOME BUYERS

59% of prospective buyers in Qtr2’20 are first-time buyers,

essentially unchanged from a year earlier (58%), but lower than

two years ago (63%).

BY GENERATION: 84% of Gen Z’s planning to buy a home are

first-timers, compared to 68% of Millennials, 52% of Gen X’s,

and 21% of Boomers.

BY REGION: Over 60% of prospective buyers in the Northeast

and South are buying a home for the first time. The share is

above 55% in the Midwest and West.

72%

54%63% 61%

53%60% 58% 60% 63% 61% 59%

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84%68%

52%

21%


62%

56%

61%

57%


NEW OR EXISTING HOME?

40% of buyers in Qtr2’20 are looking to buy an existing home,

24% a new home, and 37% would buy either type.

By GENERATION: Over ¼ of Gen Z and Millennials would prefer

a new home. But more than one-third of every generation have

no strong preference between a new or existing home.

BY REGION: More than 30% of prospective buyers in every

region would buy either type of home. Buyers in the South are

the most likely to prefer a new home (27%).

40% 37%

24%

Existing home Either New or Existing New home

34%26%

21%12%

36% 34%39% 41%


New Either New or Existing

24%20%

27%21%

32%36% 37% 38%


New Either New or Existing

AVAILABILITY EXPECTATIONS

In the second quarter of 2020, 63% of prospective home buyers

expect that finding the right home will get harder or stay the

same. A quarter expect it will get easier in the months ahead.

BY GENERATION: Expectations that housing availability will

worsen or stay the same are highest among Boomers (70%),

followed by Millennials (64%) and Gen Z buyers (62%).

BY REGION: 67% of buyers in the West and 64% in the Northeast

expect that availability will worsen or stay the same in the

months ahead. At least 60% in the Midwest and South agree.

34%

16% 21% 19% 19%22% 20% 21% 23% 25%

25%

59%

73%68% 71% 72%

67% 67% 68% 65%62% 63%

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Easier Harder / About the same

62% 64% 58%70%


64%60% 61%

67%


CHANGES IN INVENTORY

57% of buyers in Qtr2’20 report seeing fewer/same number of

homes for-sale* than three months earlier. Only 29% are finding

more homes available on the market.

BY GENERATION: A majority of buyers in every generation report

seeing fewer/same number of homes for-sale than three

months earlier, led by Boomers (62%) and Gen X buyers (61%).

BY REGION: Buyers in the West are the most likely to report

seeing fewer/same number of homes for-sale (60%), followed

by those in the Northeast and South (both 56%) and the Midwest

(53%).

* Homes with buyer’s desired features and price point.

38%

26% 29% 30% 27% 30% 27% 29% 27%31%

29%

53%63% 61% 60%

64%60% 59% 59%

62% 55% 57%

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More homes Fewer or about the same homes

55% 54% 61% 62%


56% 53%56%

60%


AFFORDABILITY EXPECTATIONS

77% of buyers in Qtr2’20 can afford fewer than half the homes

available in their markets.

Only 24% can afford the majority of homes currently available.

BY GENERATION: More than three quarters of buyers of every

generation can afford fewer than half the homes for sale in

their markets.

BY REGION: Over 70% of prospective buyers in every region of

the country can afford fewer than half the homes available for

sale in their markets.

75%82% 76% 79% 76% 78% 80% 80% 79% 78% 77%

25%18%

24% 21% 23% 22% 20% 20% 21% 23% 24%

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Can afford < 50% of homes for-sale

Can afford >= 50% of the homes for-sale

76% 76% 78% 76%


73%

76%

79%77%


BEYOND JUST PLANNING

About half (49%) of adults with plans to purchase a home have

moved beyond just planning and are actively trying to find one

to buy, a significantly higher share than a year earlier (41%).

This finding suggests the COVID-19 crisis and its accompanying

low mortgage rates have led some passive buyers to become

engaged and begin the home purchase process.

BY GENERATION: Of Millennials planning a home purchase in the

next year, 57% are already actively searching for a home.

Among Boomers, that share is only 37%.

BY REGION: Prospective buyers in the Northeast are the most

likely to be actively engaged in the purchase process (57%),

compared to 44% in the Midwest and 45% in the West.

46% 50% 47%54%

46%41% 44% 43%

49% 49%

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40%57% 47% 37%


57%44% 50% 45%


Remaining set of findings are based solely on responses from buyers who are already actively engaged in trying to find a home (i.e. active

buyers)

TIME SPENT SEARCHING FOR A HOME

The length of time spent searching for a home is growing. In

Qtr2’20, 59% of buyers actively engaged in the purchase

process have spent 3 months or longer looking, compared to

55% a year earlier.

BY GENERATION: 65% of actively-engaged Gen X buyers have

been looking for 3+ months for a home to buy, followed by

61% of Gen Z buyers, 58% of Millennials, and 47% of Boomers.

BY REGION: 62% of active buyers in the South have been trying

to find a home for at least three months. The share is at least

55% in the other three regions.

50% 46% 45%42%

46% 45%42% 40%

44%41%

50%54% 55%

58%

53% 55%58%

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< 3 months 3 months or more

61% 58% 65%47%


59% 58%62%

55%


TOP REASONS BUYERS ACTIVE FOR 3+ MONTHS

HAVE NOT BEEN SUCCESSFUL

Although the top reason long-time searchers haven’t pulled the

trigger continues to be the inability to find an affordable home

(39%), that share is much lower than a year ago (50%). Multiple

offers are a rising concern, however: 29% report getting outbid,

compared to 18% a year earlier.

BY GENERATION: Unaffordable prices are holding back 46% of

Boomers looking for 3+months, 42% of Gen Z, and 40% of Gen

X buyers.

BY REGION: Over 40% of active home buyers (looking for

3+months) in the West and Midwest have failed to buy a home

because of a shortage of affordable homes.

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Can't find a home at a price I can afford

Can't find home with features I want

Can't find a home in the neigborhood Iwant

39%36%32%

50%

29%18%

42% 36% 40% 46%


34% 45% 35% 47%


NEXT STEPS IF STILL UNABLE TO FIND HOME IN

MONTHS AHEAD

When asked what they’ll do next if still unable to find a home in

the next few months, about half of active buyers say they will

continue looking in their preferred location; 37% will expand their

search area; 21% will accept a smaller/older home; and 19% will

buy a more expensive home.

Difficulties finding a home to buy has led 19% of active buyers

to give up until next year or later. That share is up from 16%

a year earlier.

19%

19%

21%

37%

51%

Give up trying to find a home until

next year or later

Buy a more expensive home than

origianlly intended

Accept a smaller/older home than

originally intended

Expand my search area

Continue looking until the ‘right’

home opens up in a preferred location

13%16% 18% 16% 14% 16% 15% 16% 16% 19%

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POLL DESIGN

The Housing Trends Report is based on quarterly polls conducted

for NAHB by the research firm Morning Consult.

Polls are based on a national sample of adults selected to

proportionately represent the US adult population in terms of

age, gender, region, race/ethnicity, and education. Further

weights are applied to the final set of respondents to ensure

proper representation across these demographic variables.

Table below shows sample size and dates of data collection.

Sample

size Collection

Period

Qtr4’17 2,800 November 16-19, 2017

Qtr1’18 11,674 March 28 – April 1, 2018

Qtr2’18 15,412 June 26 – July 8, 2018

Qtr3’18 20,051 September 25 – October 8, 2018

Qtr4’18 16,891 December 17 – January 9, 2019

Qtr1’19 15,401 March 18 – March 29, 2019

Qtr2’19 17,521 June 17 – June 27, 2019

Qtr3’19 17,601 September 9 – 22, 2019

Qtr4’19 19,804 December 17 – 24, 2019

Qtr1’20 21,652 March 17 – 28, 2020

Qtr2’20 19,800 June 16 – 28, 2020

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