First Timers Likely to Turnaround in 2015
First-time buyers have nearly vanished from many housing markets in recent years, falling to their lowest level in nearly three decades.
“Rising rents and repaying student loan debt makes saving for a downpayment more difficult, especially for young adults who’ve experienced limited job prospects and flat wage growth since entering the workforce,” Lawrence Yun, chief economist of the National Association of REALTORS®, said in a report earlier this month. “Adding more bumps in the road is that those finally in a position to buy have had to overcome low inventory levels in their price range, competition from investors, tight credit conditions, and high mortgage insurance premiums.”
But this could change in 2015.
“First-time buyers in this year are essentially at their low point,” says Yun, adding that first-time buyers made up 29 percent of existing-home sales in October. “I do anticipate some growth going into next year.”
He notes the market is already showing signs of opening the doors to more first-time buyers. Stronger employment and the loosening of some underwriting standards are developments that are already paving the way for the first-time buyer’s return. Plus, the return of mortgages that allow buyers to put down 3 percent—such as those recently proposed by mortgage finance giants Fannie Mae and Freddie Mac—could help bring about higher numbers of first-time buyers.