Home buyers are feeling the effects of a tough year filled with high mortgage rates, high prices, and limited resale inventory. The tight conditions have left 67% of Americans saying the housing market has never been worse for buyers than it is right now, according to NerdWallet’s 2024 Home Buyer Report.
The negative sentiment is felt strongest among the youngest generations, with 74% of Generation Z saying the housing market has never been worse for buyers than it is right now, compared with 71% of millennials, 66% of Gen X, and 60% of baby boomers.
“2023 was terrible to home buyers, but 2024 will be better as mortgage rates fall and homes become more affordable,” says Holden Lewis, NerdWallet home and mortgages expert. “Actually, ‘less unaffordable’ might be a better way to say it. Buyers will likely struggle to find affordable homes in 2024, but the home buying experience might not be as miserable as in 2023.”
While 12% of Americans say they plan to purchase a home in the next 12 months, the average price they hope to spend is $274,800, which is well below the national median sales price. Of those who plan to buy, Gen Z and millennials represent 21% each compared with 9% of Gen X and 4% of baby boomers. More urban Americans plan to buy in the next 12 months (19%) compared with 10% of suburban and 8% of rural respondents.
In 2023, 23% of Americans who began last year with the intention of buying a home were successful (having purchased or in the process of purchasing) by year’s end, according to the NerdWallet survey conducted online by The Harris Poll in late November. The 77% share who had the intention to buy but couldn’t was an increase from 66% of unsuccessful would-be buyers in 2021.
Up from 69% in 2023 and 63% in 2022, 74% of Americans say there is something preventing them from buying a home in 2024. Almost half say not having enough money saved for a down payment is the main setback. The cost of living, a low income, the lack of available homes within a budget, credit scores, high mortgage rates, and the current economic climate were also noted reasons.
According to the report, nearly two-thirds (64%) of Americans say buying a home is not the measure of achievement it once was, and 54% of Americans say there is too much pressure to own a home in the United States, a sentiment more commonly felt among younger generations, with 60% of Gen Z and 60% of millennials agreeing.
The lack of inventory has kept high prices in effect, NerdWallet points out. “Though new-home construction is going strong, it would take a significant number of current homeowners selling their homes in pursuit of another to increase inventory in a meaningful way,” adds Lewis.
Some of the things that current homeowners say could motivate them to sell and buy another home in 2024 are the very solutions to the lack there of—29% of current owners would buy this year if prices came down, 27% say they would buy if the “right” home came along, and 11% say they would if more homes were listed.
Yet, some Americans who rent plan on doing so forever (37%), and at least a share of renters are OK with that; 55% of renters saying they prefer renting to all the expenses and effort of homeownership, while 56% of renters don’t think they’ll ever be able to afford homeownership.
