- Buyers making first purchase drop to 32% of housing market
- Rising prices holding back young shoppers, Realtors group says
The portion of U.S. homebuyers making their first residential purchase fell for a third straight year, and is now at the lowest level since 1987.
The share of first-time buyers dropped to 32 percent from 33 percent last year, according to a National Association of Realtors survey that covered transactions in the 12 months through June. That’s below the long-term average of almost 40 percent, the group said in its report, released Thursday.
Rising home prices are holding back many young would-be buyers who can’t easily save for a down payment because of student-loan burdens and soaring apartment rents. The median amount of student debt for all buyers was $25,000, according to the survey. And the prices of the least-expensive previously owned homes -- those most likely to be bought by first-time buyers -- are rising faster than those of costlier residences.
“It’s just a lack of affordable homes, especially in the starter range,” Lawrence Yun, chief economist at the National Association of Realtors, said in a telephone interview. “At a time when housing wealth is growing, we have fewer people participating in this recovery, and that worsens wealth inequality in the U.S.”
The typical first-time buyer was 31 years old and purchased a 1,620-square-foot (150-square-meter) home costing $170,000, while repeat buyers were more than two decades older and bought a median 2,020-square-foot house costing $246,400.
The homeownership rate rose in the third quarter for the first time in two years. The share of Americans who own their homes was 63.7 percent, up from 63.4 percent in the previous three months, according to the Census Bureau.