First-time Home Buyer Market Faces Challenges

According to the National Association of Home Builders (NAHB), competition is stiff in housing markets across the country. Limited inventory of existing and entry-level homes combined with interest rate hikes are causing prices to rise and expectations to decline — particularly among first-time buyers.

In a recent NAHB poll that asked prospective home buyers about their perceptions of the housing market, 40 percent think finding the right home will become harder in the months ahead; 25 percent believe market conditions will stay about the same; and 27 percent think it will get easier.

“Today’s consumers are more informed about the housing market than ever before, and they’re often very particular about what they want,” says NAHB economist Rose Quint, who coordinated the poll. “But demand is exceeding supply and many buyers – especially younger ones – simply don’t have the resources to get everything on their wish list. That’s not deterring them from homeownership; it’s just compelling many of them to be more flexible with their search criteria.”

The most-wanted features listed by both first- and second-time home buyers are much the same, and the top two – a living room and laundry room – are identical, just in reverse order. Other features highly desired by both groups include a dining room, garage storage, walk-in closets, and having a shower and tub in the master bath. Among the notable disparities between the lists, “front porch” was ranked No. 7 by first-time buyers, but it didn’t even make the list for current/former homeowners in the market to buy. In contrast, current/former homeowners listed several necessary features that first-timers didn’t, such as a patio, eat-in kitchen, hardwood flooring, ENERGY STAR-certified appliances and granite countertops.

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