HOUSING TRENDS REPORT QUARTER 3, 2020eyeonhousing.org/.../2020/10/HOUSING-TRENDS-REPORT-Q320.pdf ·...

HOUSING TRENDS REPORT

QUARTER 3, 2020 (Data Collected: September 14-27)

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

13% of respondents in Qtr3’20 are prospective home buyers

(they have plans to buy a home within 12 months), 1 percentage

point higher than a year earlier. This is the first year-over-year

gain in the 3-year history of this series.

BY GENERATION: Millennials are the generation most likely to

want to buy a home (22%), even slightly higher than a year

earlier (20%).

BY REGION: The share of respondents planning to buy a home in

the Northeast rose to 16% in Qtr3’20, up from 11% a year

earlier. In the West, the share rose from 12% to 16%.

24%

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

13%

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11%20%

12%6%

14%22%

14%6%

Gen Z Millennials Gen X Boomers

Q319 Q320

11% 11% 13% 12%16%

10% 12%16%

Northeast Midwest South West

Q319 Q320

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

The share of prospective buyers who are first-timers is declining:

from 61% in Qtr3’18, to 60% in Qtr3’19, to the latest 55% in

Qtr3’20.

BY GENERATION: 81% of Gen Z’s planning to buy a home are

first-timers, compared to 64% of Millennials, 45% of Gen X’ers,

and 24% of Boomers.

BY REGION: About half (49%) of prospective buyers in the

Northeast are purchasing a home for the first time. The share is

highest in the Midwest, where it reaches 59%.

72%

54%63% 61%

53%60% 58% 60%

63% 61% 59% 55%

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81%64%

45%

24%


49%59% 57% 53%


NEW OR EXISTING HOME?

The share of buyers looking to purchase a newly-built home rose

to 31% in Qtr3’20, up from 18% a year earlier. The share

indifferent between a new or existing home, on the other hand,

declined from 41% to 32%.

By GENERATION: At least 30% of every generation would prefer

a new home, with the exception of Boomers (only 16%).

Instead, 49% of this oldest cohort prefer an existing home.

BY REGION: In the Northeast and West regions, more buyers

would prefer new homes over existing ones. The opposite is true

in the South and especially in the Midwest, where 53% prefer

existing homes.

41% 41%

18%

37%32% 31%

Existing home Either New orExisting

New home

Q319 Q320

30% 33%35%

16%

40% 36% 32%

49%


New Existing

39%

16%29%

35%33%

53%

38%32%


New Existing

AVAILABILITY EXPECTATIONS

In Qtr3’20, 28% of prospective home buyers expect that finding

the right home will get easier in the months ahead, compared to

21% a year earlier. Strong home sales in the summer of 2020

may have contributed to buyers’ improving perceptions.

BY GENERATION: Between the third quarters of 2019 and 2020,

expectations that housing availability will ease up improved most

significantly among Gen X buyers (21% to 32%) and Millennials

(22% to 30%).

BY REGION: Between the third quarters of 2019 and 2020,

expectations that housing availability will ease up improved

significantly in the West (16% to 28%) and the Northeast (24%

to 35%).

34%

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

25% 25%28%

59%

73%68% 71%

72%67% 67% 68% 65% 62% 63% 61%

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Easier Harder / About the same

20% 22% 21% 17%21%

30% 32%

19%


Q319 Q320

24%18%

23%16%

35%

23% 24%28%


Q319 Q320

CHANGES IN INVENTORY

35% of buyers report seeing more homes for-sale* in Qtr3’20

than a quarter earlier (i.e. the peak of the COVID crisis). This

finding reflects increased levels of new home production and

listings of existing homes between the spring and summer of

2020.

BY GENERATION: The two generations most likely to report

seeing more homes for-sale in Qtr3’20 than three months earlier

are Gen X (39%) and Millennial (37%) buyers.

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

seeing more homes for-sale (37%), followed by those in the

South (36%) and West (35%).

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

38%

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

29%35%

53%63% 61% 60%

64%60% 59% 59%

62% 55% 57% 56%

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More homes Fewer or about the same homes

32% 37% 39% 27%


37%

32%

36% 35%


AFFORDABILITY EXPECTATIONS

27% of buyers in Qtr3’20 say they can afford half or more of

the homes available in their markets, compared to 20% a year

earlier. The increase is an indication that lower mortgage rates

have had a stronger impact on buyers’ perceptions of

affordability than rising home prices.


the share of buyers who can afford half or more of the homes

available rose most significantly among Millennials (17% to

31%), but dropped among Boomers (23% to 19%).

BY REGION: Between the third quarters of 2019 and 2020, the

share of buyers who can afford half or more of the homes

available rose most significantly in the Northeast (21% to 39%),

but dropped in the Midwest (23% to 19%).

75%82%76% 79% 76% 78%

80% 80% 79% 78% 77% 72%

25%18%

24% 21% 23% 22% 20% 20% 21% 23% 24%27%

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Can afford < 50% of homes for-sale

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

19% 17%24% 23%26%

31% 29%

19%


Q319 Q320

21% 23% 19% 17%

39%

19%24% 28%


Q319 Q320

BEYOND JUST PLANNING

50% of adults with plans to purchase a home have moved

beyond planning and are actively trying to find one to buy,

compared to 44% a year earlier. This suggests the COVID-19

crisis and its accompanying low mortgage rates continue to lead

some passive buyers to engage and begin the purchase process.


larger shares of Millennials (45% to 58%) and Gen X’ers (42%

to 52%) planning to buy a home have become engaged and are

actively searching for a home. In contrast, fewer prospective

Gen Z and Boomer buyers report having started the process.

BY REGION: Between the third quarters of 2019 and 2020, larger

shares of prospective buyers in every region are actively trying

to find a home to buy.

46% 50% 47%54%

46%41% 44% 43%

49% 49% 50%

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43% 45% 42% 44%35%58% 52%

33%


Q319 Q320

50%

40%43% 45%

56%

42%48% 52%


Q319 Q320

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 continues to grow.

In Qtr3’20, 62% of buyers actively engaged in the purchase

process have spent 3 months or longer looking, compared to

58% a year earlier.

BY GENERATION: 62% of Millennial and 57% of Boomer active

buyers have been trying to find a home for at least 3 months,

compared to 56% and 51%, respectively, a year earlier.

BY REGION: 64% of active buyers in the West and 65% in the

South have been trying to find a home for at least three months,

compared to 53% and 56%, respectively, a year earlier.

50%46% 45%

42%46% 45%

42% 40%44%

41%38%

50% 54% 55%58%

53% 55%58% 60%

56%59% 62%

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< 3 months 3 months or more

71%56% 61% 51%

66% 62% 64% 57%


Q319 Q320

65% 58% 56% 53%61% 54%65% 64%


Q319 Q320

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

(38%), that share is lower than a year ago (45%). On the other

hand, the share who blame getting outbid by other offers almost

doubled in the last year, from 15% to 27%.

BY GENERATION: Losing out to higher offers is the reason 31% of

Gen X’ers and 29% of Millennials searching for 3+months haven’t

been successful, up from 16% and 15%, respectively, a year earlier.

BY REGION: Between the third quarters of 2019 and 2020, larger

shares of active home buyers (looking for 3+months) in every region

have failed to buy a home because their offers are getting outbid.

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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 I want

Get outbid when I make offer

38%

45%

27%15%

25%15% 16% 9%11%

29% 31%17%


Q319 Q320

12% 12%17% 18%

30%

18%25% 29%


Q319 Q320

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, 26% say they’ll buy a more expensive home,

up significantly from 9% a year earlier. The share who will expand

their search area is also higher, up from 35% to 43%. The one

thing they are less likely to do than a year ago: continue looking

in the same location (down from 52% to 47%).

Difficulties finding a home to buy will likely lead 20% of active

buyers to give up until next year or later. That share is up

from 15% a year earlier.

20%

21%

26%

43%

47%

15%

16%

9%

35%

52%

Give up trying to find a home until

next year or later

Accept a smaller/older home than

originally intended

Buy a more expensive home than

origianlly intended

Expand my search area

Continue looking until the ‘right’

home opens up in a preferred location

Q319

Q320

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

19% 20%

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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

Qtr3’20 17,601 September 14 -27, 2020

HOUSING TRENDS REPORT QUARTER 3, 2020eyeonhousing.org/.../2020/10/HOUSING-TRENDS-REPORT-Q320.pdf ·...

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