Financial Woes Stopping Some Potential Buyers

It isn’t the COVID-19 pandemic or the lack of available and affordable housing on the market, though they both are factors, that is preventing most people from buying right now.

According to a recent NerdWallet survey of more than 2,000 Americans, it’s their own finances that are roadblocks. Granted, this could be due to the pandemic, but most delayed buyers are struggling with their money. Thirty-eight percent of respondents said the top reason they are not searching for a home to purchase now is the lack of savings for a down payment, while 32% said their credit score was the cause and 29% said low income. Thirty-one percent did cite the coronavirus pandemic as an issue on their path to homeownership, while 25% said the lack of inventory in their budget range prevented them from buying a home. Nearly 30% of potential sellers reported that the pandemic has delayed their plans from putting their homes on the market.

However, these reasons didn’t thwart every would-be buyer. Of those who had planned to buy in 2020, 43% either bought a home or were in the process of finalizing a home purchase by the end of the year. About 11% of Americans said they plan to buy a home in 2021, representing around 28 million people, while around 26 million plan to become first-time homeowners in the next five years. Forty-three percent of survey respondents said the current economy and political climate makes them more likely to buy a home, compared to 37% who said it is less likely. For those looking to buy this year, 53% want outdoor living space, while 44% want room for a home office.

Yet, homebuyers still need to weigh the costs of homeownership. For recent homebuyers, 41% said home repairs and maintenance have been some of the biggest financial stressors and 28% said their monthly mortgage payments are one of their biggest money stressors.