With reports of continued low mortgage rates, many might assume the housing market would be booming with home sales. However, it would seem that some other economic factors are affecting potential home buyers’ decisions.
The number of adults planning to purchase a home has dropped 2% since last year, and the number of first time home buyers among the groups looking to purchase a home is down 5%, from 63% in 2018 to 58% this year. According to an article published by CNBC.com, written by Anne Cusak, a lack of affordable home coupled with worries about the economy and personal economic stability are to blame.
According to Rose Quint, the National Association of Home Builders assistant vice president for survey research, “…potential buyers are held back by the lowest levels of affordability in a decade.” Many first time home buyers are limited in their budget; as home prices increase, they aren’t necessarily able to keep up. Since the lower end of the real estate market has seen the fastest price increase, these home buyers are being priced out.
Even if the home prices are within reach and the mortgage rates continue to stay low, prospective buyers are less than eager to jump in when they feel their personal finances are on shaky ground. Cusak notes, “Buying a home is an incredibly emotional experience, and potential buyers will often pull back when they have the slightest fear of losing their jobs or losing any income.”
Read the entire article.