According to a Zillow survey there are plenty of renters who want to buy in the next year, but many of them won’t be able to. The main culprits are high prices due to tight supply, rising interest rates and stricter credit requirements. From the article:
Nearly 10% of renters nationwide said they wished to buy a home in the next 12 months, according to a newly-launched index from Zillow that surveyed thousands of residents in major metro areas. If all those renters were to buy homes, it would result in nearly 4.2 million first-time home sales…
And in some markets, like San Francisco, New York and Seattle, tight supply has translated into sky high prices few first-time buyers can afford. Nationwide, home prices are up some 11% last year, according to the S&P/Case-Shiller national home price index.
Meanwhile, mortgage rates have also been moving higher. The average rate for a 30-year fixed is about 4.3%, up about 0.8 of a percentage point compared with a year ago. That has made loan payments on a $200,000, 30-year mortgage about $90 a month more expensive.
Even when buyers find deals they can afford, they still may not be able to get a loan. Lenders these days require solid credit scores, well-documented incomes and job histories, as well as substantial down payments, of 20% or more, to qualify for the best mortgage deals.