There is one big thing holding today’s real estate market back: Would-be buyers can’t afford to purchase a home.

To the surprise of practically no one, the most common reason homebuyers say they haven’t purchased a home is that they’re waiting for prices to drop, according to a National Association of Realtors® survey of about 2,200 prospective homebuyers. Many are also waiting for mortgage rates to fall.

Other factors include the dearth of affordable homes, trouble saving up for a down payment, and issues getting approved for a mortgage.

“It is pretty bleak, especially for a first-time homebuyer trying to enter the market,” says Jessica Lautz, deputy chief economist at NAR. “The inability to save for a down payment is holding back potential homebuyers as well as concern about competing with multiple offers and cash buyers.”

Many first-time buyers saving up for a down payment are hampered by soaring rents, while current homeowners are facing higher property taxes. Credit card payments, student loan debt coming due, car loans, health care costs, and child care expenses are also eating into their savings. And inflation has made just about everything more expensive.

Obstacles for minority homebuyers are especially acute, according to the report.

“There’s been a harder struggle for Black and Hispanic homebuyers,” says Lautz. “The lack of homebuilding at lower price points, the lack of willingness of current homeowners wanting to move are contributing factors.”

Buyers of color were also more likely to be denied a mortgage. About 16% of Black buyers and 14% of Hispanic buyers surveyed who applied for a mortgage weren’t approved. The same was true for about 12% of white buyers and 7% of Asian buyers.

Low credit scores and not having enough money for a down payment were primary reasons why they couldn’t get a loan. Systemic racism stretching back generations is responsible for much of this. The families of many buyers of color in this country aren’t able to provide the same levels of financial assistance as the relatives of white buyers.

Homeownership is one of the main ways that Americans have traditionally built wealth that is passed down through generations. After World War II, the U.S. government made it easy for white veterans to purchase homes—but prevented many veterans of color from doing the same. They were prohibited from purchasing properties in many white communities and denied cheap mortgages. Those who did succeed in becoming homeowners despite the odds were at risk of their land being seized through harassment or eminent domain.

“We know that having assistance with a down payment from friends and relatives can really catapult someone into homeownership,” says Lautz. “We also know that minority homebuyers are less likely to have that assistance.

Roughly 1 in 6 home shoppers report experiencing discrimination during their homebuying process, according to the NAR survey.

About 16% of Black and Hispanic buyers were the victims of discrimination as were 14% of Asian and 13% of white buyers. More than half of these buyers of color believe they were discriminated against based on their race.

Just over half of Black buyers reported being steered into or away from certain neighborhoods. About a third said a homeowner or real estate agent refused to show them a home.

“Unfortunately, we are seeing that potential homebuyers are continuing to face discrimination in the homebuying process,” says Lautz. “It’s certainly happening in many different ways, whether that’s stricter loan requirements or refusal to even call some back to obtain a mortgage. We know that minority homebuyers are facing a hard road.”

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