Decline of first-time buyers is holding back housing market recovery
Thursday, November 13, 2014
Despite an improving job market and low interest rates, the share of first-time buyers fell to its lowest point in nearly three decades and is preventing a healthier housing market from reaching its full potential, according the 2014 National Association of Realtors® Profile of Home Buyers and Sellers
The survey shows the share of first-time buyers dropped 5 percentage points from a year ago to 33 percent, representing the lowest share since 1987 (30 percent).
Lawrence Yun, NAR chief economist, says there are many obstacles young adults are enduring on their path to homeownership.
“Rising rents and repaying student loan debt makes saving for a downpayment more difficult, especially for young adults who’ve experienced limited job prospects and flat wage growth since entering the workforce,” he said. “Adding more bumps in the road, is that those finally in a position to buy have had to overcome low inventory levels in their price range, competition from investors, tight credit conditions and high mortgage insurance premiums.”
The 2014 NAR Profile of Home Buyers and Sellers can be ordered by calling 800.874.6500, or online at www.realtor.org/prodser.nsf/Research. The study costs $19.95 for NAR members.