Spring home-buying season is officially here, and homebuyers across the country are now projected to dominate the market.
But as homeownership demand heightens, new survey data from Realtor.com suggests many prospective buyers will grapple with housing affordability.
“The 2019 spring home-buying season will be characterized by rising home prices, a moderate pace of home sales, and an influx of inventory,” Realtor.com Chief Economist Danielle Hale said. “More homes on the market and lower mortgage rates will help offset some difficulties associated with price gains, but affordability will remain the primary challenge for shoppers, particularly in lower price segments.”
In fact, according to the company’s data, nearly half of shoppers are looking for homes at or under $200,000, which despite less competition, will prove difficult to find.
This is because that segment of housing has experienced the largest annual inventory decline, according to Realtor.com.
This could prove to be troublesome, especially since respondents indicated rising home prices (38%) and falling interest rates (26%) had a greater impact on their search.
Furthermore, survey data revealed that only 17% of this year’s shoppers plan to offer more than asking price, retreating from 26% last year. Similarly, only 33% of shoppers this year expect to put down more than 20%, which is significantly less than last year’s 40%.
“The spring home-buying season is an improvement over last year from an inventory perspective nationwide, but would-be buyers still face challenges,” Hale said. “This year, shoppers are going to be grappling with their budgets, rather than competition from a horde of other buyers. Instead of worrying about which tactics will help them get ahead, potential buyers will have to decide what they are willing to give up in order to stick to their budget.”
NOTE: Realtor.com’s survey is in conjunction with Toluna Research and is based on 1,015 respondents who are planning to purchase a home in the next 12 months.
