Lower Rates Spark Housing Demand

The retreat in mortgage interest rates during the first quarter of 2023 (from the 20-year peak reached in the fall of 2022) led a record share of adults in the US – 18 percent – to declare having plans to buy a home within a year – the largest share since the inception of this series in 2018. The finding also means the share of prospective buyers jumped 5 points in a single quarter, rising from 13 percent in the final quarter of 2022.

Relatively lower interest rates in the first quarter of 2023 also pushed more 1st-time home buyers to enter the market: 71% of all prospective buyers (a series-high) reported this would be their first time buying a home, up from 61% in the final quarter of 2022.

The share of adults with plans to buy a home in the next 12 months rose in all regions of the country between the final quarter of 2022 and the first quarter of 2023: Northeast (11% to 19%), Midwest (10% to 14%), South (14% to 17%), and West (14% to 23%). Similarly, the 1st-timer share gained ground in all four regions between the fourth quarter of 2022 and the first quarter of 2023:

Northeast (64% to 66%), Midwest (58% to 67%), South (60% to 68%), and West (62% to 75%).

** Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets. The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult. Results are seasonally adjusted. A description of the poll’s methodology and sample characteristics can be found here. This is the first in a series of six posts highlighting results for the 1st quarter of 2023.