Survey Shows Need for More Single-Family Home Construction
WASHINGTON—Over three-quarters of surveyed households would purchase a single-family home if they were to buy in the next six months, and 79% of renters would choose to buy outside of an urban area, according to the second installment of the National Association of Realtors new quarterly consumer survey. The survey also found that confidence about now being a good time to buy is waning amongst renters, particularly in the West–where prices have solidly risen.
In NAR’s first quarter Housing Opportunities and Market Experience (HOME) survey, respondents were asked about their confidence in the U.S. economy and various questions about their housing expectations and preferences, including a question on if they were to purchase a house in the next six months, what type of home and in what area would they choose to buy.
The survey data reveals an overwhelming consumer preference for single-family homes in suburban areas. Most current homeowners (85%) and 75% of renters said they would purchase a single-family home, while only 15% of homeowners and 21% of renters said that would buy in an urban area.
Lawrence Yun, NAR chief economist, says the survey findings call attention to the glaring need for more supply of single-family homes. “The American Dream for most consumers is not a cramped, 500-square-foot condo in the middle of the city, but instead a larger home within close proximity to the jobs and entertainment an urban area provides,” he said. “While this is not a new discovery, supply and demand imbalances and unhealthy levels of price growth in several metro areas have made buying an affordable home an onerous task for far too many first-time buyers and middle-class families.”
According to Yun, it’s time for homebuilders to double their focus on constructing single-family homes. With millennials increasingly buying in the suburbs—as NAR reported earlier this month—tight inventory and affordability concerns will likely worsen without significant headways made in housing starts in relation to job creation.