Increasing New Home Prices Have Prospective Buyers Looking at Alternatives
Share of Mortgage Loans in Forbearance Decreases to 2.21 Percent
According to the latest National Association of Home Builders (NAHB) Housing Trends Report (HTR), the number of prospective buyers looking for a newly built home has declined steadily since reaching 42% in Q4 of 2020. In Q3 of 2021, that number was down to 32%. Of course, when compared to Q1 of 2018, when there were only 15% of prospective buyers looking for a new home, it looks rather substantial.
The reason for the decline, according to the HTR, is strong gains in the new home prices. The share of buyers who have no preference — new home or existing construction — has gone from 27% to 34% in the same time period.
Looking at the information regionally, the share of buyers who would prefer a newly built home declined dramatically between Q1 and Q3 of 2021 in the Northeast (60% to 34%) and the West (51% to 39%). In the Midwest, the share peaked in the final quarter of 2020 at 27%, fell to 19% by the second quarter of 2020, but then rose slightly in third quarter to 21%. A more consistent 30% to 33% of buyers in the South have preferred a new home in the past five quarters.
FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.