Low Rates, COVID are Motivating Prospective Home Buyers

high percentage of those who told the National Association of Home Builders
(NAHB) late last year that they were thinking of buying a home have now turned
thought into action. Rose Quint writes in the NAHB Eye on Housing blog
that 15 percent of those queried in its 4th Quarter 2020 Housing
Trends survey said they were considering a purchase and now 56 percent of them
are actively looking
. A year ago, only 43 percent of those considering buying
had shifted into gear.

says this is the fourth consecutive year-over-year
rise in the share of prospective buyers who have become active buyers. She identified
several possible reasons for the most recent uptick; fear of missing out on low
interest rates
, a need for more space due to COVID-19, and a desire to move to
outlying suburbs.

Most of the increase in buying
activity was among Millennials and Gen X’ers. Millennials who transitioned from
thinking to action rose from 46 percent in Q4 of 2019 to 65 percent in the same
quarter of 2020 and for Gen X’ers the change went from 43 percent to 57
percent. The shares among Gen Z and Boomer generations remained relatively flat
with a 1-point increase in each case to 43 percent and 38 percent,

Geographically, larger shares of
prospective buyers in every region are actively trying to find a home to buy
than a year ago, but the increase is most notable in the West and Northeast.

Quint says that, as the share of
prospective buyers has increased, so has the length of time they spend
searching. In the fourth quarter of 2020, 69 percent of buyers actively engaged
in the purchase process have spent 3 months or longer looking, compared to 60
percent a year earlier. This marks the eighth consecutive year-over-year gain
in the share of active buyers looking for three months or more for a home to

Source: mortgagenewsdaily.com