With tight supply levels and ever-rising prices, the US real estate market currently presents some of the most challenging conditions for buyers ever. A recent survey pinpoints the specific obstacles in their way over the next eight months. However, despite the hurdles, most respondents still believe in the American dream of homeownership.
The National Association of Realtors (NAR) conducted a survey late last year and has just published the results. The questionnaire asked respondents to detail the difficulties they face in the property market. The sample included successful buyers as well as potential homeowners among all races and ethnicities in the US.
Main obstacles in the US real estate market
According to the survey, market conditions place the most barriers in the way of homeownership. Specifically, respondents cite the lack of affordable homes, an increasingly significant obstacle as prices rise. Almost half of those interviewed said that affordability was the main difficulty they faced.
Lack of supply
Around 34% said they’d suffered from the lack of homes ticking their criteria boxes. This market condition ties in with the problem of competing with multiple other buyers in a supply-tight market. In some parts of the US, such as Florida, inventory levels now stand at less than a month.
The survey also highlighted financial challenges as another problem for would-be homebuyers. Almost 30% claimed that saving for a down payment is a particular problem for them. In addition, over half said it would take them between 6 months and 3 years to save enough for the deposit.
However, when it comes to mortgage loans, the majority received approval. Just a tiny percentage had had their application turned down by lending entities.
Cost of US real estate
In terms of property prices, around a fifth of those interviewed spent less than US$100,000 on their primary home. For 18%, their purchase cost between US$100,000 and US$200,000, with a similar figure spending up to US$300,000.
When it comes to investment or buy-to-let properties, 25% of respondents spent under US$100,000, the highest proportion in the survey. 13% spent up to US$200,000 and around 10% upped their budget to a maximum of US$300,000. At the higher end of the price bracket, 12% paid between US$700,000 and 800,000 for their investment property.
American dream continues
Despite the challenges they face when buying property, almost all respondents believe that homeownership is still the American dream. Over half those surveyed strongly agree with the statement and the sentiment is highest among Hispanics and Black (non-Hispanic) ethnic groups.