The National Association of Realtors® surveyed approximately 2,200 potential homebuyers, and to everyone's surprise, the most common reason homebuyers said they haven't purchased a home yet is that they're waiting for home prices to fall.
Many are also waiting for mortgage rates to fall.
Other factors include a scarcity of affordable housing, difficulty saving for a down payment and difficulty getting approved for a mortgage.
Things are pretty bleak, especially for first-time buyers trying to enter the market," said Jessica Lautz, NAR deputy chief economist. The inability to save enough for a down payment is holding potential homebuyers back, as well as making them worry about competing with multiple offers and cash buyers."
Many first-time buyers are hampered by skyrocketing rents when saving for a down payment, while existing homeowners face higher property taxes. Credit card payments, expiring student loan debt, car loans, health care costs and child care expenses are also eating into their savings. And inflation is making all of them more expensive.
Minority homebuyers face particularly serious obstacles, the report says.
The situation is even tougher for black and Hispanic homebuyers," said Rounds. The lack of low-cost home construction and the lack of willingness of existing homeowners to relocate are contributing factors."
People of colour homebuyers are also more likely to be denied a mortgage. About 16 percent of black buyers and 14 percent of Hispanic buyers surveyed who applied for a mortgage were not approved. The same was true for about 12 percent of white buyers and 7 percent of Asian buyers.
Low credit scores and insufficient down payments were the main reasons they were unable to get a loan. Systemic racism, passed down through generations, is a major contributor to this situation. Many families of homebuyers of colour in this country are unable to provide the same level of financial assistance as relatives of white homebuyers.
Homeownership is one of the traditional ways that Americans have built wealth for generations. After the end of World War II, the U.S. government facilitated the purchase of homes for white veterans, but prevented many veterans of colour from purchasing homes. They were barred from buying property in many white neighbourhoods and were unable to obtain cheap mortgages. Those who managed to become homeowners despite the odds risk having their land harassed or expropriated.
Says Rounds, "We know that getting help with a down payment from a friend or family member can really make someone a homeowner." We also know that minority homebuyers are less likely to receive such help.
According to the NAR survey, about one in six homebuyers reported experiencing discrimination during the homebuying process.
About 16 percent of black and Hispanic homebuyers were victims of discrimination, as were 14 percent of Asian homebuyers and 13 percent of white homebuyers. More than half of these homebuyers of colour believe they have been discriminated against on the basis of race.
Slightly more than half of black buyers said they were steered into or out of certain neighbourhoods. About a third said homeowners or real estate agents refused to show them homes.
My house.
Says Rounds, "Unfortunately, we see potential home buyers continue to face discrimination in the home buying process." Whether it's stricter lending requirements or refusing to call some people back to get a mortgage, this discrimination is sure to happen in many different ways. We know that minority homebuyers are facing a tough road.
