Winning Strategies in Real Estate: Where Have All The First Time Buyers Gone?

Where Have All The First Time Buyers Gone?

It has been reported that in January of 2011 first-time home buyers made up less than 30 per cent of the market.  This is the lowest it has been since the National Association of Realtors began tracking first-time home-buyer activity on a monthly basis.

In a healthy real estate market first-time buyers can be responsible for as much at 45% of all home purchases. Where are all the first-time buyers now when interest rates are so low and home prices have fallen to such affordable levels?

Back in March a USA Today article considered some of the reasons first-time home buyers are hesitant in the current market:

Lending standards have gotten tougher: It is now more difficult for many first-time home buyers to meet credit or employment history requirements.  Plus, lenders are requiring higher credit scores and some want higher down payments.

Expired tax credits: Federal tax incentives lured first-time home buyers in 2009 and 2010 and gave home sales a big boost.  Now that those tax credits have expired, first-time home buyers are not as eager to get into the housing market.

Competition from cash buyers: NAR reported recently that cash buyers are accounting for a record-reaching 33% of existing home sales.  Obviously sellers prefer cash transactions because there is lower risk and greater likelihood that they will close.  Competing against these cash buyers has also left some first-time buyers out.

 

 

When you are ready to buy or sell...call me.  I can help.

Over 30 years of experience.

 

Tony Morganti, CRS, ABR

330-352-9513

Comment balloon 3 commentsTony Morganti • May 06 2011 01:14AM

Comments

We have had a lot of first time buyers looking in our area.

Posted by Tim Lorenz, 949 874-2247 (TIM LORENZ - Elite Home Sales Team) about 7 years ago

There is also the element of Fear.

The American Dollar is no longer credible on the World Market.  

Real Un-Employment is 20% +.

Companies and factories are shutting down, and/or leaving the USA.

Restaurants and Small Business are going out of business at a rate not seen since the Great Depression of the 1930's.

Gasoline is at $4.00 and climbing.   The Price of Food is increasing dramatically.

Home Prices continue to drop (excepting the Washington DC area and parts of California).

 

Until First-Time Buyers have faith in the Economy, they will continue to sit on the Fence, waiting to see what happens.

 

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) about 7 years ago

I think Fred has made some very good points here.  Consumer confidence is important but Jobs, Jobs, and Jobs are the three biggest factors.  When the job market recovers, Real Estate will be close behind.

Posted by Doug Bullwinkel, NMLS #281609 (Envoy Mortgage) about 7 years ago

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