Buyer optimism from the last half of 2017 is eroding, driven by concerns about low inventory.
According to an NAHB survey, 15% of prospective buyers thought it would get easier to find a home in the coming months, down from the 27% in the fourth quarter of 2017. Slightly more buyers (8%) also thought the market would get harder to navigate, or remain the same, in the last half of 2018. The age breakdown was as you’d expect: with the youngest respondents as the most optimistic buyers and the “seniors” as the least optimistic.
Survey Question: Do You Expect House Search to Get Easier/Harder in Months Ahead?
Closely linked to buyer perceptions of the market is another key metric: availability.
Just 24% of surveyed buyers in 2018 indicated that they saw more homes on the market. 64% reported they saw the number of homes for sale staying about the same, or even dwindling. This corresponds to concerns about low inventory, which hampered the 2017 market and appears to have hit the 2018 market just as hard. In fact, the problems created by inventory may have gotten worse. 34% of prospective buyers in the last quarter of 2017 felt that there was more inventory available—by 2018 that number dropped by ten percent.
Survey Question: Do You See More/Fewer Homes For-Sale in Your Market (vs. 3 months earlier)?
Less than a third of respondents across all generations of prospective home buyers reported growth in inventory for their desired price range. This is an indication that the problem impacts the entire market, not just first-time buyers—making low inventory a big problem for builders.