Fewer Prospective Home Buyers Are Actively in the Market

Fewer prospective homeowners are making the move from thinking about buying to actively shopping than a year ago, according to a new study by the National Association of Home Builders (NAHB). Rose Quint, writing in NAHB's Eye on Housing blog says the association's most recent Housing Trends Report, covering the second quarter, found 12 percent of adults are "thinking" about buying a home, but only 41 percent of those are doing more than that. This is 9 percentage points fewer than those who were actively shopping in the second quarter of 2018. Quint says this statistic suggests that lower interest rates "have not had the expected effect of nudging more people to start looking for a home to buy."

There was little difference in the share of those actively looking among the three younger age cohorts, Millennials, Gen X'ers, and Boomer buyers. Close to 40 percent of each group have moved beyond just planning and begun the home search.  Among senior prospective buyers, however, only 21 percent are actively shopping.

The Northeast had the highest percentage of those in the market, 47 percent, followed by prospects in the West (43 percent). Thirty-nine percent of those in both the Midwest and South were in the active shopping group.  

The length of time those who are looking have been doing so has not changed appreciably since last year's second quarter survey.  In the most recent quarter, 45 percent had been at it for less than three months while the remainder had been shopping for longer. Those shares were essentially unchanged from a year earlier, when they stood at 46 percent and 54 percent, respectively. The percentage of shoppers who had spent more than three months looking peaked in the fourth quarter of last year, about the same time that interest rates hit a multi-year high.