Navigating the Toughest Housing Affordability Crisis in 40 Years
In a landscape where housing affordability is hitting a nearly 40-year low, potential homebuyers across all racial and ethnic groups are taking a step back. A new report by the National Association of Realtors (NAR) in collaboration with Morning Consult has laid it all out. Their 2023 study, “Experiences & Barriers of Prospective Home Buyers Across Races/Ethnicities,” paints a vivid picture of the challenges faced by white, Hispanic/Latino, Black, and Asian Americans who aspire to homeownership.
The study is a companion piece to NAR’s member-focused research, which zeros in on the latest trends in residential real estate from the perspective of agents who have worked with clients yet to purchase a home. “Sky-high home prices, limited inventory, and climbing mortgage interest rates have combined to create an incredibly challenging environment for buyers, particularly those from underrepresented communities,” observes Jessica Lautz, NAR’s Deputy Chief Economist and VP of Research.
So, what’s holding people back? A significant number of respondents from each group indicated that they’re playing the waiting game. Asian (27%), Hispanic (24%), Black (20%), and white (15%) prospective buyers are largely biding their time, hoping for home prices to plummet. Interestingly, 15% of white respondents are also waiting for mortgage rates to dip before making a move.
Beyond waiting for better pricing and interest rates, the study revealed that nearly a quarter of all respondents from the four groups find it challenging to locate homes within their budget range. Between 18% to 25% are crossing their fingers for mortgage rates to become more bearable.
The current study not only echoes its predecessor in outlining the numerous barriers faced by hopeful homeowners but also underscores the urgent need for solutions. As buyers from all walks of life struggle in this tight market, the question becomes: how long can people afford to wait?
