While mortgage rates are slowing, the steady elevated rates combined with home price appreciation is slowing housing demand, according to the NAHB’s latest Housing Trends Report. The NAHB estimates the share of adults with plans to purchase a home within a year fell to 15% in the second quarter of 2023, down from a record high of 18% in the first quarter.
First-time buyers are disproportionately affected by elevated mortgage rates and home prices because they generally lack equity savings from a previous home sale to help with a down payment. In the second quarter of 2023, the share of all prospective buyers who are in the market for the first time dropped to 61%, down significantly from 71% in the first quarter.
The share of adults with plans to buy a home in the next 12 months declined across all regions of the country between the first and second quarters of 2023: Northeast (19% to 18%), Midwest (14% to 13%), South (17% to 11%), and West (23% to 17%).
Similarly, the first-timer share lost ground in all four regions between the first two quarters of 2023: Northeast (66% to 61%), Midwest (67% to 61%), South (68% to 59%), and West (75% to 65%).Read More