First-Timers Make Up Smaller Share of Buyers
Daily Real Estate News | Thursday, August 02, 2012
The share of first-time home buyers on the market is falling to historical lows, despite record levels of housing affordability. With record low mortgage rates and falling home values, many would expect first-time home buyers to be flooding the market for their chance to get part of the American dream.
However, the number of first-time home buyers is shrinking, falling in May and June, even as the housing market shows signs of picking up. According to National Association of REALTORS® housing data, 32 percent of buyers in June purchased their first home. Yet, the historical average tends to be 40 percent.
Meanwhile, investors offering all-cash deals for properties is soaring, prompting some analysts to point the finger at cash investors for increasingly shutting out first-time home buyers in the market.
Investors, with their attractive cash bids, have been flooding the market with purchases of entry-level homes and foreclosures, while first-time home buyers continue to struggle to secure financing from banks’ tightened lending standards as well as save for a downpayment.
Source: “First-time Buyers Slipping as Share of Home Sales,” The Oregonian (July 30, 2012)