NAHB reports larger shift to suburban home buying

A recent study conducted by the National Association of Home Builders (NAHB) found that COVID-19 has impacted the housing preferences of 25% of home buyers.

The survey asked about location preferences both prior to COVID-19 and now. Results show that a segment of home buyers have shifted their preference towards the outlying suburbs due to the health crisis.

Prior to COVID-19, 26% of buyers wanted to buy a home in an outlying suburb, according to the NAHB. But since the beginning of the pandemic that share is now 30%. 

The share of buyers who would prefer a close-in suburb went from 29% prior to COVID-19 to 28% now; for a rural area, the share went from 24% to 23%; and for the downtown area of a central city, from 12% to 11%. 

The share of buyers who want to purchase their next home in the central city outside of downtown remained unchanged at 9% before and after the onset of COVID-19.

A separate report shows that more consumers expect to buy a house over the next four months.

The December Household Spending Survey, published by the New York Federal Reserve Bank, showed a modest increase in household spending over the past four months, and a surge in the median expectation for year-ahead household spending to the highest level since August 2015. 

Only 2.2% of households bought a house or apartment over the past four months, lower than the 3.8% in August. 

However, the average percentage of households planning to buy houses within the next four months jumped from a series low of 3.3% in August to 6.2% in December 2020.