Rising prices, declining inventories and worries about their abilities to both save for a down payment and qualify for a mortgage are taking their tolls on would-be buyers’ confidence levels about their participation in the housing market.

The National Association of REALTORS (NAR) just released its latest Home Opportunities and Market Experience (HOME) for Q1 2018. Asking consumers whether or not this was a good time to buy a home, 68% of buyers and 55% of renters responded positively. This 68% represents a decrease from 72% in Q4 2017 and a decrease from 75% in Q1 2016.

Within this 68% of buyers who strongly (38%) and moderately (30%) believe that this is a good time to buy a home, the most confident would-be buyers are those with incomes +$100,000, who live in the South and Midwest, who live in rural areas and who are baby boomers.

Those consumers on the selling side of the equation, on the other hand, are feeling confident about this being a good time to sell. Sellers’ confidence levels rose +3% quarter over quarter to 74%. This level of confidence among sellers is just one point shy of matching the highest confidence share (75%) ever in Q3 2017. The most confident among this 74% are households in the West.

Lawrence Yun, chief economist with NAR, summed up the overall picture of consumer confidence by saying, “This spark in home prices is not easy for many home buyers, especially first time buyers, to overcome…adding more fuel to the affordability fire is the fact that mortgage rates have shot up to a 4 year high in just a few months. Many house hunters are telling REALTORs that they are dispirited by the stiff competition for the short number of listings they can afford.”

The top barriers to down payments for would-be buyers and renters include…

Limited income                            47%

Student debt                               30%

Rising costs                                28%

Health/medical costs                  19%

Only 14% of respondents indicated “…nothing was holding them back” from saving for a down payment.

The top barriers to qualifying for a mortgage for would-be buyers and renters included…

Income uncertainty                     45%

Low credit score                         34%

Too much debt                           26%

Lack of financial knowledge        29%