First-Time Home Buyers Held Back in 2014 – PERHAPS 2015 will be a Great Year!
First-time buyers purchased nearly one-third of previously owned homes sold in 2014, the lowest share, 29%, since NAR began tracking the data in 2008.
Mounting student debt, higher rents and tight credit conditions continue to make it tough for first-time borrowers to save enough money for a down payment and qualify for a mortgage.
Another measure of first-time home buyer activity from the National Association of Realtors that survey buyers activity found the annual share had fallen to its lowest level in nearly three decades. Mr. Yun said the improving economy and policy changes intended to make mortgages more accessible to first-time borrowers could entice buyers to enter the Real Estate Market in 2015.
But they may find homes are less affordable in the months ahead. Total housing inventory dropped 11.1% in November 2014, raising some concerns that lower selection and potentially faster price appreciation could offset overall demand from buyers encouraged by a stronger economy, Yun said.
“The still-tight mortgage credit conditions and more challenging first-time home buyer affordability restrictions revealed by the failure of home sales to continue recovering last year remain a serious concern as we head into 2015,” Morgan Stanley economist Ted Wieseman said in a note to clients Friday.