Fewer Adults Plan to Purchase a Home in 2023
The share of adults planning to purchase a home during the next 12 months fell to 13% in the fourth quarter of 2022 from 15% the previous quarter. A declining share of active homebuyers is likely due to a corresponding drop in housing affordability at the close of 2022 as mortgage interest rates surpassed 7%, according to the National Association of Home Builders' Eye on Housing.
More than half of all prospective buyers in all four regions are first-time buyers, a segment that has faced perhaps the largest barriers to homeownership over the last several years as the share of affordable starter homes fell significantly during a mid-pandemic buying frenzy.
In the third quarter of 2022, as buyers tried to stay ahead of further interest rate hikes, the share of prospective buyers contemplating a home purchase for the first time spiked to 66%. In the fourth quarter, as rates did in fact reach levels not seen since 2002, the share dropped again, to 61%.