How long have you been searching for your new home? The latest Housing Trends Report from the National Association of Home Builders (NAHB) suggests that you've been looking for a while and may be getting frustrated in the process. You may be coming down with the homebuyer's blues.
Potential homebuyers are being squeezed in multiple directions. The supply of affordable homes remains tight while home prices are rising. According to CoreLogic, home prices in December 2018 rose by 4.7% above the previous year, outpacing wage gains. Over the same time period, the Bureau of Labor Statistics (BLS) shows real (inflation-adjusted) wages only increased by 1.2%.
Add the threat of future interest rate hikes, and it's easy to see why potential homebuyers are frustrated. The Housing Trends Report reflects that growing frustration. Approximately 72% of NAHB survey respondents expect their home search to get harder in the coming year, compared to 65% who felt that way last year.
Other survey results support that conclusion.
According to the Housing Trends Report, 64% of potential homebuyers report fewer available desirable and affordable homes for sale, and only 23% can afford the majority of homes available. Just over three-quarters (76%) of buyers can afford less than half the homes available – making the search even tougher.
When asked why a home search greater than three months had not been successful, the two top reasons were no affordable homes (49%) and an inability to find a home with features the buyers want (44%).
Collective home shopping difficulties appear to be pushing some potential homebuyers out of the market. Only 13% of NAHB Q4 survey respondents reported planning to buy a home over the next twelve months – almost half of the 24% reported in the 2017 Q4 survey.
Similarly, only 54% of prospective buyers in Q4 2018 are actively trying to find a home, instead of just making plans to buy. At the same time last year, two-thirds of prospective buyers were actively searching.
If you're having trouble with your home search, review your tactics. Can you make improvements that increase your home buying chances?
Assess your housing goals realistically. Are you buying more home than you can afford (or need) just because a bank will lend you that much money? You may be narrowing your options too much based on perception instead of reality.
If you're handy enough to pull it off, consider a fixer-upper as a bargain – but make sure to get a thorough home inspection first to avoid any nasty surprises.
Are you getting the most out of your real estate agent? An experienced and motivated agent can provide insight and expertise that can make the difference between a purchase and a missed opportunity.
Keep your credit score as high as possible by paying all your bills on time and keeping credit utilization low – don't overextend yourself by opening new accounts or maxing out existing ones. You'll receive better interest rate offers with a higher credit score, which may bring more houses into your affordability range. You can check your credit score and read your credit report for free within minutes by joining MoneyTips.
Don't forget to shop around for mortgages. You may receive better offers from certain lenders, especially if you already have other accounts with them.
A home buying search can be frustrating in any market – much less a market with low inventory and rising costs – but patience and planning will see you through. Chase the homebuyer's blues away. Don't give up your search and keep your finances in the best shape possible so that you can strike when you find the right home for you at a reasonable price.
MoneyTips is happy to help you get free mortgage and refinance quotes from top lenders.
Originally Posted at: https://www.moneytips.com/more-prospective-homebuyers-frustrated/697