First-Time Home Buyers Are Receding
The rate of first-time home purchasers has fallen to its lowest share since January, according to the National Association of REALTORS®' latest existing-home sales report. NAR's report says that rising home prices and persistent low inventories of homes for-sale are likely to blame.
The share of first-time home buyers fell for the second consecutive month in July, reaching 28 percent, and down from 30 percent in June, NAR reports. A year prior, first-time home purchasers represented 29 percent of all purchasers.
Meanwhile, existing-home sales – transactions completed for single-family homes, townhomes, condos, and co-ops – are on the rise, reaching a seasonally adjusted annual rate of 5.59 million in July.
"The fact that first-time buyers represented a lower share of the market compared to a year ago even though sales are considerably higher is indicative of the challenges many young adults continue to face," says Lawrence Yun, NAR's chief economist. "Rising rents and flat wage growth make it difficult for many to save for a down payment, and the dearth of supply in affordable price ranges is limiting their options."