HOUSING TRENDS REPORT QUARTER 4, 2020

HOUSING TRENDS REPORTQUARTER 4, 2020(Data Collected: December 15-23)

HOUSING TRENDS REPORTThe Housing Trends Report (HTR) measuresprospective home buyers’ perceptions about theavailability and affordability of homes for-sale in theirmarkets.All data are derived from national polls ofrepresentativesamplesofAmericanadultsconducted for NAHB by Morning Consult. This reportis released quarterly to track changes in buyers’perceptions over time.Generation definitions:ooooGen Z*: Born 1997 to 2002.Millennial: Born 1981 to 1996.Gen X: Born 1965 to 1980.Boomer: Born 1946 to 1964.Methodology:The interviews were conducted online and the data were weighted toapproximate a target sample of adults based on age, educationalattainment, gender, race, and region. In qtr1’19, weights wererefined to better match the general US population and provide moreconsistent distributions across demographic groups over time. Thesenew weights were applied retroactively to the entire series in order tomaintain comparability. In qtr3’19, Gen Z was incorporated into thegenerational analysis for the first time.* In 2020, Generation Z is constrained to end in the year 2002 because only adults 18 or oldercan participate in the poll.Results are not yet seasonally adjusted due to the short-time horizonof the series; therefore, only year-over-year comparisons arestatistically valid.

PLANNING TO BUY A HOME WITHIN 12 MONTHS The share of adults with plans to buy a home within 12 months(prospective buyers) rose to 15% in Qtr4’20, up from 11% a yearearlier. This is the largest year-over-year gain in the 3 yearhistory of this series.15%Qtr4'20Qtr3'20Qtr1'2013%Qtr2'2010% 11%Qtr4'1912% 12% 11%Qtr3'19Qtr1'19Qtr4'18Qtr3'1814% 13% 13% 13%Qtr2'18Qtr1'18Qtr4'1717%Qtr2'1924% BY GENERATION: A larger share of Gen Z, Millennials, and GenX’ers have plans to buy a home in Qtr4’20 than did a year earlier.Millennials saw the largest increase, up from 19% to 27%.Q41913%16%Gen Z27%19%MillennialsQ42018%12%Gen X5% 5%Boomers BY REGION: A larger share of adults in every region have plansto buy a home in Qtr4’20 than did a year earlier. The Northeastsaw the largest increase, up from 10% to 19%.19%Q41910%9% 10%NortheastMidwestQ42015%12%18%12%SouthWestThe rest of this report is based entirely on prospective home buyers, i.e. thoseplanning to buy a home within the next 12 months.

1ST-TIME HOME BUYERSQtr4'20Qtr3'20Qtr2'20Qtr1'20Qtr4'1960% 58% 60% 63% 61% 59% 55% 61%Qtr3'1953%Qtr2'1963% 61%Qtr1'19Qtr1'18Qtr4'1754%Qtr3'1872%Qtr4'18The share of prospective buyers who are first-timers declinedslightly in the year ended in Qtr4’20, down from 63% to 61%.Qtr2'18 BY GENERATION: Lower shares of prospective Gen Z, Millennial,and Gen X buyers are purchasing a home for the first time,compared to a year earlier. Gen Z has the largest share of 1sttimers, at 81%.88% 81%78%Q41970%57%Q42050%20% 25%Gen ZMillennialsGen XBoomers BY REGION: Significantly fewer prospective buyers in theNortheast (55%) are 1st-timers compared to a year earlier(65%). The share was flat in the West, and changed slightly inthe Midwest and t55%Northeast

NEW OR EXISTING HOME? 41% of buyers in Qtr4’20 are looking to purchase a newly-builthome, more than twice the 19% share a year earlier. On theother hand, the share looking for an existing home declined from40% to 30%.Q41940%Q42041%30%41%29%Existing home19%Either New orExistingNew home By GENERATION: 50% of Millennial and 48% of Gen Xprospective buyers would prefer to buy a new home. In contrast,50% of Boomers and 38% of Gen Z buyers are looking for anexisting home.New50%48%38%21%Gen ZExisting25%50%25%13%MillennialsGen XBoomers BY REGION: In the Northeast and West regions, a majority ofbuyers would prefer a new home. In contrast, in the Midwest,46% are looking for an existing 33%South21%West

AVAILABILITY EXPECTATIONS In Qtr4’20, 37% of prospective home buyers expect that findingthe right home will get easier in the months ahead, compared to23% a year earlier. The improvement in buyers’ perceptions onavailability reflects the fact that more new and existing homeswere sold in 2020 than in any year since 2006.67% 68% 65% 62%63% 61%54%37%Qtr4'20Qtr3'2028%21% 23% 25% 25%Qtr2'2022% 20%Qtr1'20Qtr4'18Qtr3'18Qtr2'1867%Qtr4'1972%16% 21% 19% 19%Qtr1'18Qtr4'1734%68% 71%Qtr2'1959%Qtr1'1973%Harder / About the sameQtr3'19Easier BY GENERATION: Between the fourth quarters of 2019 and 2020,expectations that housing availability will ease up improved mostsignificantly among Gen X buyers (23% to 43%) and Millennials(24% to 40%). Gen Z buyers did not experience similar increase.27% 27%Gen Z40%24%Millennials43%23%Gen XQ419Q42018%22%Boomers BY REGION: Between the fourth quarters of 2019 and 2020,expectations that housing availability will ease up jumped upmost significantly in the Northeast (22% to 46%) and the West(21% to 2040%21%West

CHANGES IN INVENTORY 41% of buyers report seeing more homes for-sale* in Qtr4’20than the previous quarter, up from 27% in Qtr4’19. Theimprovement in buyers’ perceptions on inventory also reflectsthe fact that new home production in 2020 reached its highestlevel since 2007.50%41%Qtr4'20Qtr3'2029% 35%Qtr2'2031%29% 27%Qtr1'20Qtr2'19Qtr1'19Qtr4'18Qtr3'1862% 55% 57% 56%59%Qtr4'1959%30% 27% 30% 27%26%29%Qtr2'18Qtr4'1738%63% 61% 60% 64% 60%Qtr1'1853%Fewer or about the same homesQtr3'19More homes BY GENERATION: Between the fourth quarters of 2019 and 2020,the share of buyers seeing more homes for-sale jumpedsignificantly among Gen X (28% to 46%) and Millennial (30% to47%) buyers.47%30% 27%Gen Z30%Millennials46%28%Gen XQ419Q42027%21%Boomers BY REGION: Between the fourth quarters of 2019 and 2020, theshare of buyers seeing more homes for-sale more than doubledin the Northeast (22% to 53%) and rose significantly in the West(24% to 42%).Q41953%22%Northeast33% 31%Midwest29%37%South* Homes with buyer’s desired features and price point.Q42042%24%West

AFFORDABILITY EXPECTATIONS 38% of buyers in Qtr4’20 are able to afford half or more of thehomes available in their markets, up from 21% a year earlier.The increase is an indication that historically low mortgage ratescontinue to have a stronger impact on buyers’ perceptions ofaffordability than rising home prices.Can afford 50% of homes for-saleCan afford 50% of the homes for-sale79% 76% 78% 80%80% 79%78% 4'2027%20% 20% 21% 23% 24%Qtr2'19Qtr1'19Qtr4'1824% 21% 23% 22%Qtr3'1818%Qtr2'18Qtr4'1725%82% 76%Qtr1'1875% BY GENERATION: Between the fourth quarters of 2019 and 2020,the share of buyers who can afford half or more of the homesavailable rose significantly among Gen X (20% to 45%)andMillennial (19% to 41%) buyers.45%41%24% 23%Gen Z19%Millennials20%Gen XQ419Q42027% 28%Boomers BY REGION: Between the fourth quarters of 2019 and 2020, theshare of buyers who can afford half or more of the homesavailable rose most significantly in the Northeast (24% to 52%)and the West (21% to 2041%21%West

BEYOND JUST PLANNING 56% of adults with plans to purchase a home have movedbeyond planning and are actively trying to find one to buy, upfrom 43% a year earlier. Several factors explain why moreprospective buyers have become active, including fear of missingout on low mortgage rates, desire for more space due to COVID19, and desire to move out to outlying % 50% 47%46% 41% 44% 43% 49% 49% 50% BY GENERATION: Between the fourth quarters of 2019 and2020, larger shares of Millennials (46% to 65%) and Gen X’ers(43% to 57%) with plans to buy a home are actively engaged inthe search process.65%41% 42%Gen Z46%MillennialsQ41957%43%Q42037% 38%Gen XBoomers BY REGION: Between the fourth quarters of 2019 and 2020,larger shares of prospective buyers in the West (41% to 61%)and the Northeast (49% to 67%) are actively trying to find ahome to buy.Q41967%49%39%Northeast45%Midwest43% 50%SouthQ42061%41%WestRemaining set of findings are based solely on responses from buyerswho are already actively engaged in trying to find a home (i.e. activebuyers)

TIME SPENT SEARCHING FOR A HOME The length of time spent searching for a home continues to grow.In Qtr4’20, 69% of buyers actively engaged in the purchaseprocess have spent 3 months or longer looking, compared to60% a year earlier.3 months or more41% Qtr1'19Qtr4'18Qtr3'18Qtr2'18Qtr1'1850% 54% 55%53% 55%46% 45%46% 45%42%42%50%69%59% 62%Qtr3'2058% 60%58%Qtr2'20 3 months BY GENERATION: More than 50% of active buyers of everygeneration are spending 3 months looking for a home, but GenZ saw the largest jump in that share, from 45% to 65%, in thelast year.Q41945%65%Gen Z64% 71%65% 72%MillennialsGen XQ42049% 53%Boomers BY REGION: At least 66% of active buyers in every region havebeen trying to find a home for 3 months, with the Northeast(64% to 74%) and the South (57% to 67%) experiencing thelargest increases in the last year.Q41964% 74%Northeast60% 66%Midwest57%67%SouthQ42063%68%West

TOP REASONS BUYERS ACTIVE FOR 3 MONTHSHAVE NOT BEEN SUCCESSFUL For the first time in this series history, the number one reason longtime searchers haven’t made a home purchase is not because oftheir inability to find an affordably-priced home (33%), but becausethey continue to get outbid by other offers (40%). The reasons areflipped from a year earlier, when 44% cited unaffordable prices andonly 19% better offers by other buyers.Can't find a home at a price I can affordCan't find home with features I wantCan't find a home in the neigborhood I wantGet outbid when I make % BY GENERATION: Losing out to higher offers is the reason 49% ofGen X’ers and 41% of Millennials searching for 3 months haven’tbeen successful, up from 14% and 22%, respectively, a year earlier.Q41929% 27%Gen Z22%41%MillennialsQ42049%14%11% 14%Gen XBoomers BY REGION: Losing out to higher offers is the reason 48% of 3 monthactive buyers in the West, 40% in the Northeast, and 35% in theSouth haven’t been successful, up 20 points from a year hQ42048%23%West

NEXT STEPS IF STILL UNABLE TO FIND HOME INMONTHS AHEAD When asked what they are most likely to do next if still unable tofind a home in the next few months, 50% of active buyerssearching for 3 months will continue looking in the same locationand 38% will expand their search area, but the largest changesfrom a year earlier come in the shares likely to give up until nextyear or later (16% to 28%), to buy a more expensive home (16%to 27%), and to accept a smaller/older home (19% to 28%).Continue looking until the ‘right’home opens up in a preferred location51%50%39%38%Expand my search areaBuy a more expensive home thanorigianlly intended16%Accept a smaller/older home thanoriginally intendedQ41919%28%Give up trying to find a home untilnext year or later16%Q42028%Difficulties finding a home to buy will likely lead 28% of activebuyers to give up until next year or later. That share is upfrom 16% a year '19Qtr2'19Qtr1'19Qtr4'18Qtr3'18Qtr2'1818% 16% 14% 16% 15% 16% 16% 19% 20%13% 16%Qtr1'18 27%

POLL DESIGN The Housing Trends Report is based on quarterly polls conductedfor NAHB by the research firm Morning Consult. Polls are based on a national sample of adults selected toproportionately represent the US adult population in terms ofage, gender, region, race/ethnicity, and education. Furtherweights are applied to the final set of respondents to ensureproper representation across these demographic variables. Table below shows sample size and dates of data 0November 16-19, 2017Qtr1’1811,674March 28 – April 1, 2018Qtr2’1815,412June 26 – July 8, 2018Qtr3’1820,051September 25 – October 8, 2018Qtr4’1816,891December 17 – January 9, 2019Qtr1’1915,401March 18 – March 29, 2019Qtr2’1917,521June 17 – June 27, 2019Qtr3’1917,601September 9 – 22, 2019Qtr4’1919,804December 17 – 24, 2019Qtr1’2021,652March 17 – 28, 2020Qtr2’2019,800June 16 – 28, 2020Qtr3’2017,601September 14 -27, 2020Qtr4’2013,112December 15 -23, 2020

prospective buyers would prefer to buy a new home. In contrast, 50% of Boomers and 38% of Gen Z buyers are looking for an existing home. BY REGION: In the Northeast and West regions, a majority of buyers would prefer a new home. In contrast, in the Midwest, 46% are looking for an existing home. 40% 41% 19% 30% 29% 41% Existing home Either New or