Big cities and suburbs have fallen out of favor with homebuyers with almost 50% looking to buy in a small town or rural area, according to a new Realtor.com site visitor survey from July.
- 49.6% of homebuyers are looking to buy in a small town or rural area, up from 45% back in the spring and only slightly off the high seen at the height of the pandemic in the summer of 2020.
- Suburban areas saw a slight uptick in July to 33% but are still down from the 36% reported at the start of the year. Urban homebuyers have fallen to just above 12% well off the pre-pandemic high of 20%.
Affordability concerns. High prices and climbing mortgage rates have caused 34.5% of buyers to report budget challenges in their homebuying experience.
Concerns about the economy. It’s not just housing costs but the overall economy impacting buyers as well. 40.5% of all buyers and 45.3% of first-time buyers believe the US is currently in a recession. This well above the 32% reported in the spring.
- Gallup reported earlier this week that Americans’ average positive rating of 25 U.S. business and industry sectors that drive the nation’s economy has fallen to its lowest point since the Great Recession at 36%. During the Great Recession the positive view fell to 34%.
Higher prices, higher rates, and recession fears have pushed homebuyers looking to buy within the next 6 months down to 45.7%, this is down 4 percentage points from July 2021 and is only slightly above where we were in July 2020. With price corrections looking to happen sooner rather than later, it will be interesting to see which impacts buyers more going forward. Will a pullback in home prices be enough to bring more buyers back to the table, or will it also take an improvement in overall economic sentiment?