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Friday, February 06, 2015
NAR Survey Shows Decline in First-Time Homebuyers
Despite an improving
job market and low interest rates, the share of first-time buyers fell to
its lowest point in nearly three decades and is preventing a healthier
housing market from reaching its full potential, according to an annual
survey released this week by the National Association of Realtors.
The long-term average in this survey, dating back to 1981, shows that four
out of ten purchases are from first-time homebuyers. In this year’s survey,
the share of first-time buyers dropped 5 percentage points from a year ago
to 33 percent, representing the lowest share since 1987 (30 percent).
Some analysts say young, first-time buyers will not make up a significant
part of the buyers' market anytime soon.
"This group has had troubles economically getting jobs, being in debt
from school and not having employment history or savings for down payments
to qualify for a home loan," said Dr. Jim Gaines, research economist
with the Real Estate Center at Texas A&M University.
"If they have a job, it may not be all that secure or at least they
think they need to maintain flexibility in case they have to move or
relocate — so renting is a more viable option," Gaines said. "And
with all the new, upscale rental units available, renting is seen as a more
attractive option than being stuck with a long-term mortgage."