Bidding Wars are Top Reason Keeping Buyers From Purchasing

More active homebuyers are struggling to purchase due to bidding wars and less due to affordability. The National Association of Home Builders found that of the 16% of American adults considering a move in the first quarter of 2021, 63% have turned active, but a large share remain on the hunt for a home. Forty-five percent of buyers cite losing bidding wars as the most common reason they have not yet purchased while 32% say they cannot find a home within their budget. This flips the script from one year earlier when 40% of buyers struggled to find an affordable home and 23% continued to lose bidding wars.

When asked what they are most likely to do next if still unable to find a home in the next few months, 50% of active buyers searching for 3+ months will continue looking for the ‘right’ home in the same location – about the same as a year earlier. On the other hand, 42% will expand their search area, an increase from the 34% willing to take that step a year earlier.

Difficulties finding a home to buy will likely lead 25% of active buyers to give up until next year or later, up from 16% a year earlier. Historical data show a steadily rising trend in the share of long-term searchers likely to quit looking for a home until next year or later, as the latest increase marks the fifth year-over-year rise in this metric.

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