Home buyers say that affordability is a bigger concern than the lack of homes for sale — the first time since early 2012 that price has trumped inventory in buyers' minds, according to a new survey.
Nearly 33 percent of 1,300 home buyers say that "affordability in the area I want to buy" was the biggest obstacle to a home purchase in November, according to results from Redfin's Real-Time Buyer Survey. That compares to 11 percent of buyers who cited the biggest obstacle as "not enough homes for sale."
"If you can't afford any of the homes for sale, it doesn't matter how many homes are on the market," says Leslie White, a Redfin real estate professional based in Washington, D.C. "Despite the low interest rates, prices in D.C. are so high right now, many home buyers feel priced out of the market. They're being forced to decide between putting their home search on hold and renting another year, buying a significantly smaller home, or looking in neighborhoods farther away from the city."
But some housing analysts are optimistic that the supply of homes under $300,000 will likely improve next year, as more home owners regain enough equity to put their homes on the market. Prices for homes in the low- to mid-range (generally below $310,000) rose by 12 percent this year — double the price increases for more expensive homes, according to Redfin's Research Center.
The percentage of buyers who say now is a good time to purchase a home rose slightly in November to 29 percent compared to nearly 23 percent this summer. However, the percentage of buyers who say now is a good time to buy is still down from two years ago, when home prices were more affordable and inventories were higher, according to the survey.
The survey also identified some of the top home characteristics buyers say they are looking for: short commutes and close proximity to amenities such as coffee shops (36.3 percent) and living in a highly rated school district (21.2 percent). Also, nearly 82 percent of buyers say they are willing to do some work to their home, whether they do it themselves or hire a professional. Only 18 percent surveyed say they want a move-in ready home.