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Share of First-Time Home Buyers Hits 27-Year Low

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Share of First-Time Home Buyers Hits 27-Year Low

Just 33% of primary residences sold this year were purchased by first-time buyers, down from 38% last year to the lowest level since 1987, the National Association of Realtors reported Monday.

The NAR says that the first-time-buyer share of home sales has typically hovered around 40% since 1981.

The headwinds facing young buyers are well known: higher student debt, rising rents and a weaker job market have made it harder for would-be buyers to save for a down payment and qualify for a mortgage, particularly in a lending environment where banks are much less willing to overlook credit blemishes or spotty incomes.

Separate surveys, including one by the New York Fed earlier this year, showed that  insufficient savings or incomes were the biggest headwinds keeping renters from buying homes. Many households may also be less able to get help from their parents than in the past, because their parents’ homes have fallen sharply in value.

Advocates of looser lending standards may point to the NAR’s latest survey to highlight problems on the mortgage market. But it’s worth noting that the share of first-time buyers didn’t increase during the housing bubble, when it was too easy to get a mortgage. That’s because home prices were rising. The share of first-time buyers fell to 36% in 2006, at the peak of the bubble, from 40% in the prior three years.

And even though credit was much tighter in 2009 and 2010, the share of first time buyers jumped to 47% and 50%, respectively. Lower home prices helped. So, too, did an $8,000 federal tax credit for first-time buyers, which expired in June 2010.

Home prices have been rising for the last two years—and first-time buyers have accounted for a falling share of sales in that time.

https://blogs.wsj.com/economics/2014/11/03/share-of-first-time-home-buyers-hits-27-year-low/?mod=WSJ_hpp_MIDDLE_Video_second

4 thoughts on “Share of First-Time Home Buyers Hits 27-Year Low

  1. Our kids are so effed….

    Like my grandfather said 40 years ago…”I think I’ve seen the best that this country has to offer.”

  2. #1

    All old men seem to say that. My Dad says it now. I think it is a form of sour grapes, asserting that as their life draws to a conclusion, there is nothing worth living for anyway.

  3. #2 obviously you are part of the Burger King generation mentality….I want it my way, I want it now, and I don’t give a damn who has to pay for it but I sure ain’t.

  4. After Obama raises the minimum wage, all the workers from fast food will be buying houses in Ridgewood right?

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