Why Home Buyers Are Getting Frustrated

December 19, 2018

More consumers are getting skittish about the housing market. Only 34 percent of consumers say they strongly believe now is a good time to buy, down from 43 percent a year ago, according to the National Association of REALTORS®’ Housing Opportunities and Market Experience Survey, based on a survey of more than 2,700 households.

An exasperated man staring at his laptop screen.

Tim Gouw - Unsplash

“Consistently fast-rising home prices well in excess of income growth over recent years have left buyers frustrated while slowly enticing would-be sellers to consider listing,” says Lawrence Yun, NAR’s chief economist.

More consumers are upbeat about the economy. But so far that hasn’t turned into a major boost in sales because incomes aren’t keeping pace with home appreciation. From 2012 to 2018, median home prices have increased 44 percent. On the other hand, the average hourly wage earnings have increased by just 16 percent in that time.

Nevertheless, Yun says the fourth-quarter findings that imply a softening in home buying sentiment are less a result of potential buyers holding off purchases in anticipation of lower home prices and more related to concerns over qualifying for a higher mortgage and the lack of access to affordable home listings.

“Perhaps some communities designated as Opportunity Zones can draw real estate developers using tax incentives to build affordable housing,” Yun says.