Homebuyer Buzz: Americans Still Want To Buy Their First Home, Believe it’s Getting Harder
August 3, 2021
Homebuyer Buzz is our monthly round-up of news stories related to the latest in homebuying trends — from the evolving wants of homebuyers to design news and more.
Americans, particularly first-time buyers, still want to purchase a home, but more believe it will be harder in the coming months than they did at the start of the year. We also look at homebuyer migration trends, the pandemic’s impact on foreign homebuyer interest in the U.S. market and what paint colors are most preferred by buyers.
Latest homebuyer outlooks show continued desire for homeownership
The American desire for homeownership is still increasing. The National Association of Home Builders’ latest Housing Trends Report for the second quarter of 2021 found that 17% of American adults are considering a home purchase within the next year. This share has gone up for five consecutive quarters after hitting a low in the first quarter of 2020. Of those prospective homebuyers, 64% are first-time buyers, which is the highest share in the report’s history. The largest share of adults who are planning to buy a home are located in the Northeast, while all other regions saw increases as well. Over half of all prospective homebuyers in each region represent first-time buyers. [Eye On Housing]
Prospective homebuyers believe it will be harder to find a home. Those same prospective buyers from NAHB’s Housing Trends Report believe it will be harder in the coming months to find the right home. In fact, 64% said they expect it to be harder, which compares to 54% in the fourth quarter of 2020. The expectation that it will be easier to find the right home in the months ahead decreased across all four regions between the first quarter of 2020 and the second quarter of 2021. Additionally, the share of homebuyers who reported only being able to afford less than half the homes in their markets increased to 71%, which is up from 65% in the first quarter of 2021. [NAHB Now]
The pandemic impacted foreign homebuying. In news that’s not particularly surprising but is now confirmed by the National Association of Realtors, foreign homebuyers purchased fewer homes from April 2020 to March 2021 than the previous 12-month period. NAR found that purchase of existing homes decreased by 27% to $54.4 billion for that time period. While experts believe the drop is COVID-related, it still represents the fourth consecutive annual decline in foreign investment. The median home sales price among foreign buyers was about $352,000, which compares to an approximately $306,000 median sales price for all existing homes sold in the U.S. [HousingWire]
Japandi style is in, while buyers want blue bathrooms
The design style “Japandi” is trending. Japandi, an interior design style where Japanese minimalism intersects with Scandinavian functionality, has increased in popularity. The style incorporates natural materials like wood, dried flowers, branches and ceramics with geometric patterns, simple and sculptural silhouettes and living trees. [Dezeen]
These paint colors add value to a home. Zillow recently found that light blue is the best color to paint a bathroom to see an increase in home value, while white is best for kitchens. The findings are based on a survey of recent and prospective homebuyers in which they asked what paint colors participants would pay more for. They found gray was the best bet for a living room, with the alternatives of light green, white, dark gray and light yellow. According to the survey, pink, bright green and bright yellow should be avoided in pretty much all rooms. Meanwhile, participants liked the idea of dark blue in the bedroom, suggesting it’s the best room to go bold. [Zillow Group]
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Buyers are looking to new metros
More Redfin users are looking to move metros. Redfin found that 31.1% of their users are looking to move to a different city according to second quarter data. That’s up from about 28% during the same period in 2020. Moving to a more affordable part of the country is “the new normal” according to Redfin’s chief economist. The most popular migration destinations in the second quarter of 2021 were Phoenix, Las Vegas, Sacramento, Miami and Tampa. Relocating is easier for people from markets like Los Angeles or Seattle where they can sell their homes and sometimes afford to pay in cash in more affordable markets like Las Vegas. [Redfin]
About one-fifth of adults moved because of COVID. The Pew Research Center found that one-fifth of adult Americans moved because of COVID-19 or know someone who did. This figure includes relocating due to closed college dorms, moving from perceived unsafe communities and moving from housing that is no longer affordable. Of the 22% who said they moved or know someone who did, 6% said someone else moved into their household. These changes were most likely to impact young American adults between the ages of 18 and 29. Among those who moved, 28% said it was to reduce their risk of contracting the virus, while 20% said they wanted to be with family. [Pew Research Center]
Refrigerated mailroom storage coming to multifamily developments
Innovative apartment design incorporates more flex space and modern mailrooms. BD+C recently conducted an online interview with designers from Grimm + Parker Architects about how multifamily design is changing as a result of the pandemic. The architects surveyed residents on where current spaces were falling short and found that tenants want more room, better outdoor areas and more storage space, among other things. In mock-ups, the designers tweaked their typical one-bedroom unit to include a small office nook, a 5-foot balcony, more storage and a dedicated zone right at the entry way where residents can sanitize and organize any items. In common spaces, more workspaces were added, including rentable offices, and refrigerated storage was added to mailrooms. [Building Design + Construction]
Some states to continue eviction ban
The national ban on evictions has ended, but some states will continue statewide bans. While the national ban on evictions has now expired, Massachusetts, Nevada, New York and Oregon will temporarily ban evictions of residents with a pending rental assistance application. New York has also extended its eviction moratorium for tenants who’ve endured a COVID-related setback. Some states are also continuing bans including California and New Jersey. Update: The CDC issued a new eviction moratorium. [CNBC]
Online homebuying is not slowing down
Buyers are still interested in buying homes online. The CEO of national home builder Taylor Morrison told Bloomberg that there’s growing interest in being able to purchase homes online. Sheryl Palmer said buyers can schedule a self-guided tour from their website, view the inventory home in person and then put the model in their online shopping cart when they get home. Meritage Homes supported the popularity of online buying, citing a 15% increase in virtual sales. [Bloomberg]