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But a lack of affordable housing is holding them back from purchasing a home.
Despite low inventory and high home prices, the National Association of Realtors (NAR) Q4 Aspiring Home Buyers Profile says Americans are still holding on to their homeownership goals.
According to the study, which is based on Q4’s HOME Survey data, 91 percent of homeowners and 80 percent of non-owners still believe homeownership is part of the American dream. Furthermore, 79 percent of owners and 58 percent of non-owners said they believe it’s a good time to buy, a sentiment that was consistent across age, income, city size and regional demographics.
But the majority non-owners (56 percent) aren’t acting on their sentiments because of a lack of affordable housing options and the difficulty of saving a down payment (36 percent).
“A tug-of-war continues to take place in many markets throughout the country, where consistently solid job creation is fueling demand, but the lack of supply is creating affordability constraints that are ultimately pulling aspiring buyersfurther away from owning,” said NAR chief economist Lawrence Yun in a press release.
“These extremely frustrating conditions continue to be most apparent at the lower end of the market, which is why the overall share of first-time buyers remains well below where it should be given the strength of the job market and economy.”
Although these non-owners aren’t buying homes now, 82 percent plan to do so in the future. That’s a 10 percentage point jump from Q3.
When asked about their motivations for future homeownership, 32 percent said a change in lifestyle such as getting married, having children or retiring would be the main catalyst, followed by an improvement in their financial situation (30 percent) and the desire to settle down in one location (16 percent). Lastly, only 15 percent said a hike in their monthly rent would cause them to go ahead and purchase a home.
“Housing demand in 2018 will be fueled by more millennials finally deciding to marry and have kids and the expectations that solid job growth and the strengthening economy will push incomes higher,” said Yun. “However, with prices and mortgage rates also expected to increase, affordability pressures will persist.”
“That is why it is critical for much of the country to start seeing a significant hike in new and existing housing supply,” he added. “Otherwise, many would-be first-time buyers will be forced to continue renting and not reach their dream of being a homeowner.”
About NAR’s HOME survey
In each quarter of 2017, a sample of U.S. households was surveyed via random-digit dial, including half via cell phones and the other half via landlines. The survey was conducted by an established survey research firm, TechnoMetrica Market Intelligence. A total of 10,823 household responses are represented.