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uyers are gaining leverage in the housing market, but economic concerns are making them cautious. Two new reports from Bright MLS and John Burns Research & Consulting (JBREC) suggest that buyers are prioritizing their needs over FOMO, with many pausing or backing out of deals due to uncertainty.
The share of people buying homes because they feel ready to own or are tired of renting has dropped, indicating more purchases are driven by necessity. Buyers are choosing practicality over style, and luxury upgrades are no longer necessary to create impact. "You don't need fancy features to make a home special," JBREC researchers found.
While some analysts say it's too early to declare a buyer's market, recent reports show buyers have more negotiating power than in recent years. With an economy on the brink of recession and inventory rising, buyers are being discerning in their decisions.
This shift favors buyers over sellers and builders. According to JBREC researchers, the changing market indicates that traditional housing industry rules are becoming outdated. Buyers are willing to wait or walk away from deals if they're not right for them.
A June survey found 37% of respondents believe the country is already in a recession, with nearly half holding off on large purchases due to economic uncertainty. Bright MLS Chief Economist Lisa Sturtevant noted that buyers are prioritizing their needs over frustration at losing out on homes.
More buyers are purchasing homes out of necessity than desire for an upgrade or lifestyle change. Factors like family and career are driving home purchases, while the desire to own a home is factoring less into calculations. According to Bright MLS, 31.4% of people bought a home in Q2 2024 due to readiness or no longer wanting to rent, dropping to 26.5% this year.
Home builders should reconsider their approach, prioritizing affordability and practicality over luxury features. As buyers seek affordable options, they're moving further from metro areas or purchasing smaller homes. Builders can create impact without luxury upgrades by designing for simplicity and flexibility.
