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Homebuyers who are hoping for lower prices in 2023 are in for a ‘rude awakening’ when house hunting

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  • A recent survey found about 28 million buyers want to buy a home for about $100,000 less than the US median home price.
  • Some respondents said a souring economic climate could keep them from buying in 2023.
  • One homebuyer told Insider that she is considering moving to a new state to afford a home.

Felicia Jenner, 34, has been searching for a $200,000 home in north Denver for her and her one-year-old daughter since November 2022. But with the state’s median home price sitting at $530,000 for single-family homes and $415,000 for condos and townhomes, according to the Colorado Association of Realtors, Jenner told Insider that her home search has been disheartening at best. 

Jenner is one of about 28 million Americans—or approximately 11% of the population—who hope to buy a home in 2023, according to NerdWallet’s latest home buying survey, conducted online by the Harris Poll among 2,051 U.S. adults from December 1-5. Like many others in the cohort, Jenner’s home buying budget isn’t enough to get the job done as high mortgage rates and low housing inventory continue to keep buyers out of the market. 

“I got sick of wasting money on rent and wanted to see what I could qualify for, but it has not been promising,” Jenner told Insider. “I want to provide a safe place for my daughter, but everything I’ve seen has been an instant “no” because of location. It’s made me consider leaving Colorado altogether.” 

According to NerdWallet’s survey, Americans who plan to buy a home in 2023 hope to spend about $269,000, on average, with a median anticipated spend of about $200,000. That is compared to the national median home price of $366,000 as of December 2022, according to the National Association of Realtors

To Elizabeth Renter, a spokesperson for NerdWallet, these survey results show that many homebuyers may be in for a “rude awakening” in 2023. They’ll most likely have to give their budgets a “reality check” before making any offers, she said. 

“There are probably going to be a lot of people who are extremely disappointed when it comes time to look at home prices,” Renter said. “They’re really limiting the places where they can buy with such a small budget.”

Experts at Realtor.com recently compiled a list of 10 markets where the regular homebuyer may stand a chance at landing a home in 2023. The list includes places like Hartford, Connecticut, and El Paso, Texas, that many people overlooked during the pandemic-led housing boom between March 2020 and the summer of 2022. 

However, Renter said many homebuyers are still facing an uphill battle when it comes to buying a home. About 28% of NerdWallet’s survey respondents said a souring economy is preventing them from pursuing homeownership, up from 20% who made similar remarks in the previous two annual surveys. 

And Insider’s James Rodriguez writes that for first-time homebuyers, the outlook has never been bleaker, as soaring home prices and high mortgage rates mean first-time homebuyers are older, more likely to be living with their parents, and have to wait longer to get a house. 

Jenner conceded that she is lucky to live near her parents, which helps her save on child care costs. She said it’s been tough to balance paying almost $1,900 per month to rent in Colorado against the prospect of owning a home in another state with a lower cost of living, especially when she considers having to change jobs to one in a new state that might pay her less.

“I’m hoping the market will bend in my favor in the next few months,” Jenner said. “Otherwise, I might have to go back to renting.” 

Read the original article on Business Insider
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