Housing affordability has continued to be a challenge for the housing market as it grapples with a lack of inventory due in large part to five factors: labor, land or lots, lending, lumber and other material costs, and laws and regulatory burdens.
COVID-19 has exacerbated a number of these factors – notably material costs and labor shortages – and kept inventory low, which has caused housing prices to soar and priced numerous Americans out of purchasing a home.
According to recent research from the National Association of Home Builders, higher mortgage rates and double-digit growth in home prices are discouraging a growing share of buyers from engaging in the purchase process. At its peak in mid-2021, 61% of prospective buyers were trying to find a home to buy; that share has dropped back to pre-pandemic levels at 46%.
Nationwide, of the buyers who were actively engaged in the process of finding a home in the first quarter of 2022, 67% have spent more than three months unsuccessfully searching for a home. Although the majority will continue to search for a new home, a growing segment of prospective homebuyers are choosing to wait.
According to the NAHB’s latest Home Trends Report, the share of prospective buyers postponing their home search until next year has risen steadily from 20% in the second quarter of 2021 to 25% in the first quarter of 2022.
Chattanooga-area prospective buyers might be wondering if they should buy now or postpone. We posted this question to Patty Becknell, loan officer with PrimeLending to find out.
Becknell said, “The fear of higher interest rates, general inflation and home price inflation are in the back of everyone’s mind. But we need to remember that interest rates are still low, and with inflation causing prices to go up, the longer we wait to buy a home, the higher the cost we will incur.
“Now is the time to plan to buy your home – whether it’s an immediate or a long-term goal.”
Obtain information on the NAHB’s efforts to combat housing affordability and a list of professionals who can help you purchase your new home at www.HBAGC.net.