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Affordability, Down Payments Cited as Barriers to Homeownership

The lack of affordable homes is now firmly seated as the top reason holding potential buyers back from entering the housing market, according to a new study from the National Association of Realtors (NAR). 

This finding comes to us from the 2022 Obstacles to Homebuying Report published by the NAR. To complete the survey the NAR partnered with Morning Consult, a data intelligence company specializing in insights and custom market research, in order to get the base information for the report. 

The report, which is broken down by race/ethnicity, compares the experiences of both potential and successful home buyers and found obstacles other than affordability also affected many buyers. The biggest challenges identified by the report were a lack of affordable homes, a lack of homes that fit their criteria, competing with multiple offers, and saving for a down payment. 

"Record-high home prices and record-low inventory have made the home buying process exceedingly difficult,” said Dr. Jessica Lautz, NAR Vice President of Demographics and Behavioral Insights. “Our new study shows that while the inventory crisis is affecting potential buyers of every race, nearly all home buyers agree that homeownership is still an important part of the American Dream.” 

For example, the report found that among potential Hispanic homebuyers, the second-largest hurdle they reported facing was saving for a down payment. Potential Black homebuyers cited their lack of credit, or flat-out poor credit, as their second highest concern, while potential White and Asian buyers said that the lack of homes that fit their criteria was the second biggest factor. 

“In the current hot market, people who have traditionally enjoyed homeownership can capitalize on those gains to realize new opportunities. Meanwhile, the market becomes increasingly unaffordable, and the obstacles greater, for those trying to enter the market,” said Bryan Greene, NAR Vice President of Policy Advocacy. “NAR advocates not only for existing homeowners, but also for those aspiring homeowners whose entrance into the market is necessary for the economy to thrive.” 

Approximately three-quarters of potential home buyers are currently planning to save for a down payment, which most noted will take between six months and three years based on current market conditions. 

Among buyers who were successful in attaining homeownership, the new report found Asian respondents (51%) were more likely than White (32%), Hispanic (35%), or Black (33%) respondents to say a lack of affordable homes was an obstacle in their home purchase. The second-biggest obstacle White and Asian buyers faced was competing with multiple offers, while for Black buyers it was finding neighborhoods in which the buyers were comfortable. 

About Author: Kyle G. Horst

Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at kyle.horst@thefivestar.com.

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