Why Are Buyers Still On The Fence?

“SO IF EVERYONE IS SAYING THAT NOW IS A GREAT TIME TO BUY, WHERE ARE THESE BUYERS THEN? PEOPLE HAVE BEEN REFINANCING LATELY (TO TAKE ADVANTAGE OF THE LOW RATES), BUT NOT BUYING. WHY NOT?”

Although the time of year (winter) and the current economy have a lot to do with the lack of buyers, a recent survey by the National Association of Home Builders sheds a little more light on why many people are on the proverbial fence. In the survey, 700 self-described “on-the-fence” buyers were asked to list why they hadn’t committed to buying yet. The top three answers were:1) waiting for lower interest rates (44 percent of respondents), 2) unsure if they would qualify for financing (41 percent), and 3) believe that home prices will fall even more (38 percent). Conversely, the respondents were also asked to rank in order of importance what concessions or enticements would spur them to buy. Lower interest rates, zero-percent financing and instant equity at the time of purchase topped the list. Other considerations—such as tax credits and builder amenities or incentives—were much lower on the list. Although the survey’s sample size is relatively small, it does show that potential buyers are very much concerned with the financial considerations of buying a home in today’s market. ∆