Buyers are reporting they are eager to finally sign their closing contract on their first home.
However, how realistic are their expectations in today’s market? According to a recent survey from NerdWallet, 83% of consumers reported that buying a home is a priority. Around 11% of U.S. residents, or 28 million people, plan to purchase in 2023. Yet, for those 11% who plan to buy this year, they reported they hope to spend $269,200, on average. Comparatively, according to data from NAR, the average home price in the U.S. in December was $366,900. Among all future buyers in the survey, 86% said homes on the market currently are overpriced.
Current economic uncertainty is also causing homebuyers to pause. About 32% of consumers said they feel worse about being able to buy a home this year, but 28% said they feel better about it. Of those who feel worse, 58% said a worsening economy is to blame, 57% said it is higher mortgage rates and 57% said they expect home prices to be more expensive. More than two-thirds (67%) feel that a housing crash is coming in the next three years. But it’s not just the economy. Consumers report their own financial struggles, 24% said they expect to have have less in savings this year, 22% said they believe they will have less income and 20% said they expect to have more debt.
Ultimately, many buyers are aware of their shortfalls. More than one-third (34%) said they don’t have enough for a down payment, 31% said their income is too low, 30% said their credit score is not good and 28% said the current economic climate are all preventing them from homeownership. To help overcome these obstacles, 42% said they are saving more for a down payment, 38% plan to move somewhere more affordable, 37% plan to wait for mortgage rates to drop and 26% are now planning to buy a smaller home.
Nearly 70% of consumers who tried to buy in 2022 were unsuccessful. Around one-quarter said they made an offer, but did not go under contract, 26% said they delayed plans due to high existing home prices and 25% postponed their plans because they could not find a home. A more balanced market and knowledgeable Realtors® can help these consumers achieve their dreams of homeownership.