Photo: Beatrice Murch/Flickr
Increasing US home prices are just one of the factors holding back Americans looking to purchase their first properties as the share of first-time buyers reached its lowest level since 1987 this year.
First-time homebuyers made up a 32 percent share of those involved in market activity from July 2014 to June this year. That represents a 1 percent decline from the last survey and nearly 10 percent from the historic average dating back to 1981, according to a National Association of Realtors (NAR) survey published Thursday.
The decline marked the third year in a row that the share of first-time buyers had decreased, although the US housing market continues to recover from the Great Recession.
“There are several reasons why there should be more first-time buyers reaching the market,” said Lawrence Yun, NAR’s chief economist, in a statement, citing low mortgage rates and good job prospects for college grads among the positives. However, these supportive elements are being countered by reasons that go beyond prohibitive pricing, said Yun.
Rising rents make it harder to save for a down payment, and there is a scarcity of affordable homes for those who have put aside a nest egg. Debt is also proving to be a challenge for many, the survey suggested. “First-time buyers reported that debt… delayed saving for a down payment for a median of three years,” said Yun. Of the 25 percent of respondents who said saving was the biggest challenge, 58 percent said student loans in particular hampered their ability to save for a home, he added.
“With a median amount of student loan debt for all buyers at $25,000, it’s likely some younger households with even higher levels of debt can’t save for an adequate down payment or have decided to delay buying until their debt is at more comfortable levels,” explained Yun.
The 2015 National Association of Realtors Profile of Home Buyers and Sellers survey collected answers from 6,408 homeowners.