There may be plenty of fish in the sea, but not homes for sale.
What do dating and homebuying have in common? Several recent studies say potential homebuyers are more willing to compromise on their home purchase than their love interest.
Zillow recently released a study that says, “Most people say they have more deal-breakers and longer wish lists for a romantic partner than for a home.”
The desperation is from historically-low inventory. It’s not the only research with similar findings. Multiple studies show potential buyers are more willing to compromise to buy a house.
Here are the biggest takeaways from four recently released studies on the housing market:
- There are barely any homes for sale
- People can’t afford what’s available
- Recent homebuyers relied on government stimulus checks for a down payment
- Potential homebuyers are pickier about their romantic partners than homes
But that’s just the bird’s eye view. Let’s drill down further…
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Housing costs increase, income doesn’t
Americans’ outlook on the economy continues to get even more bleak. Fannie Mae released January’s Home Purchase Sentiment Index (HPSI) which measures how people feel about the housing market. January scored 71.8, a decrease from the prior month and the lowest score since May 2020.
While most people think it’s a good time to sell, only 25 percent of respondents said it’s a good time to buy a home – the lowest level since the survey’s inception in 2010. Young people are usually the more optimistic group, according to Fannie Mae. However, last month they were the most pessimistic about their economic future.
Americans are increasingly worried about their job stability and most say their household income has shrunk or stayed the same – meaning it hasn’t kept up with inflation.
“Younger consumers – more so than other groups – expect home prices to rise even further, and they also reported a greater sense of macroeconomic pessimism,” said Doug Duncan, Fannie Mae VP. “All of this points back to the current lack of affordable housing stock, as younger generations appear to be feeling it particularly acutely and, absent an uptick in supply, may have their homeownership aspirations delayed.”
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Not enough to go around
Climbing prices correlate to the shrinking supply of homes in America. HouseCanary, a real estate brokerage, found that new listings have declined by nearly 18 percent in the last year.
The only homes to increase in stock? The ones priced at least $1 million. Homes below $600k are expected to remain in scarce supply because of high demand and growing inflation.
Competition amongst homebuyers is relentless. Most homes are selling significantly above the listing price and are on the market for a shorter period than they were last year.
“The nation’s housing supply is dwindling once again as homes continue to sell at record prices – bucking the trend that typically sees market activity cool down in the winter months,” HouseCanary wrote.
Renters can’t catch a break either. The number of listings continues to plummet and many have faced an increase in rent.
Find out: FHA Loans Help Homebuyers Overcome Low Credit, Income
Stimulus checks propped up potential buyers
While many have been caught in the rent cycle, people who were already in the position to buy a home used their stimulus checks to seal the deal.
According to Redfin, a real estate brokerage, a quarter of all recent, first-time home buyers used their stimulus payments to put a down payment on a house.
“There was a fair amount of economic uncertainty at the beginning of the pandemic and many people initially lost their jobs due to widespread lockdowns. But plenty of Americans, particularly those who are in a position to buy a home, are now in a better financial position than before,” Redfin Chief Economist Daryl Fairweather says. “Stimulus payments provided a lot of Americans not only with necessary relief but extra money in their pockets.”
It also helped that during the pandemic, most people spent less money on traveling, eating out, or other activities – making it easier to save. While the survey did find a lot of homebuyers used stimulus payments, most Americans that received checks used the money for everyday expenses.
Find out: Americans Fear the Stock Market Will Crash. But Aren’t Doing Anything About It.
What’s love got to do with it?
Eighty percent of homeowners are in love with their property – but most people are struggling to find that special place. One-third of recent movers feel like it’s harder to find a house than a spouse.
Zillow found that most people enjoy house hunting more than dating.
Some psychiatrists even believe that the chemical reactions in the brain while looking through real-estate listings can mimic those of a romantic relationship.
“The way we shop for homes is in many ways similar to the way we meet romantic partners,” says Zillow home trends expert Amanda Pendleton. “Both involve wish lists, compromises, and deal-breakers, and much of the legwork happens online.”
The majority of Americans say that their wish-list for a romantic partner is harder to satisfy than their hopes for a home.
People are also more likely to compromise on their home than they are their partner – probably because of the competitive market. But many also believe they’re more likely to fall in love at first sight with a home than a new partner.
Find out: Millennials Are Struggling With Housing Affordability
