The housing market in 2024 has left many potential buyers at a standstill, with high mortgage rates and affordability concerns dominating the conversation. According to new research from Realtor.com, 57% of potential buyers have delayed their plans to purchase a home. But what’s really behind this hesitation, and how can buyers navigate these challenges? Let’s break it down.

The Main Challenges Facing Buyers

1. High Mortgage Rates

Mortgage rates hovering around 7% have been a significant barrier for buyers. Even with inventory recovering in many major U.S. metros, the higher rates have left potential buyers hesitant.

• Homeowners with existing mortgages are reluctant to sell, as 86% are locked into rates below 6%.
• Realtor.com’s survey shows that buyers are more likely to re-enter the market when rates drop to 5.9% or lower.

2. Personal Financial Situations

A lack of savings and high debt-to-income ratios continue to sideline many would-be buyers. This issue is especially prevalent among renters, with 44% citing their financial situation as the primary obstacle to homeownership.

3. Lack of Affordable Housing

The shortage of affordable homes remains a consistent deterrent. In many markets, rising home prices and competition make it difficult for buyers to find properties within their budgets.

How Buyer Types Differ in Their Challenges

Renters:

• 44% cite personal financial struggles as their main obstacle.
• 43% report a lack of affordable housing as a significant barrier.

First-Time Homebuyers:

• 47% say personal finances are the main reason they’ve delayed their purchase.
• Lack of affordable housing and high interest rates are also top concerns, but less impactful than financial readiness.

Repeat Buyers:

• 43% point to high interest rates as their main reason for holding off.
• Mortgage rates and affordability concerns follow closely behind.