First-time home buyers' share decreases
December 20, 2013-- Furniture Today,
The market share for first-time buyers declined slightly in 2013, no doubt a result of tighter lending controls. Thirty-eight percent of home purchases in the past year were from first-time buyers, according to the National Association of Realtors' 2013 Profile of Home Buyers and Sellers. That's a slight decrease from the year prior when first-time buyers accounted for 39% of the market, and a large dip from 2010 when newbies were half of all buyers.
Lawrence Yun, NAR chief economist said, "Given that mortgage interest rates are expected to gradually rise, we need greater access to credit for a sounder housing recovery. Affordability conditions remain favorable in much of the country, but consumers need access to safe and sound financing, particularly the 30-year fixed-rate mortgage, and with low down payment options for first-time buyers."
Prior to the 2007 Recession, first-time buyers were able to purchase homes with relatively little money down, leaving cash to purchase new furniture and necessities for the home. Without low down payment options, savings that would normally go to furnishings is being diverted to home financing.
Seventy-eight percent of first-time buyers tapped into savings for their down payment, according to the NAR study. More than one quarter of first-time buyers received a gift from a friend or relative to use as a down payment; compared with 7% that received a loan from a friend or relative.
For those first-time buyers that were able to purchase a home in the last year, the median age was 31; while the median income was $67,400. That's compared with repeat buyers whose typical age was 52 with a median income of $96,000.
The median square footage for a home purchased by a first-time buyer was 1,670. The median price that a first-time buyer spent on a home was $170,000 in the last year. In the third quarter of 2013, nationally the median home price was $207,300 for existing single family
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