A new survey has found the number of first-time buyers in the United States has fallen for the third consecutive year and figures are now at their lowest point for nearly 30 years.
Even though home sales have strengthened over the past year the market has been driven by repeat buyers who often have dual incomes. According to the article in Propertywire, the survey also found that nearly 90% work with a real estate agent to either buy or sell a property and that sale by owner transactions are at their lowest point ever.
The number of first-time buyers declined from 33% a year ago to just 32%, the second lowest figure seen since the survey began in 1981 and the lowest since 1987 when figures reached 30%. Historically the long-term average for first-time buyers is nearly 40%. Experts point out there are several reasons why there should now be more first-time buyers in the market, including continuing low mortgage rates, good job prospects for those with a college education and the fact that renting is becoming more expensive than buying in some areas.
However there are numerous hurdles being faced by prospective buyers that are slowing down many people’s entry into the property market. Higher rents are affecting people’s ability to save for a down payment and often there are few homes available that are suitable for first-time purchases. On average, existing debt slows down to saving for a down payment for three years and out of the 25% who replied that saving was the most difficult task, more than half were affected by student loans.
Strong price growth in many areas has led to a higher share of married couples purchasing properties, at 67%, up from 65% last year. These couples have a higher household income than in previous years. Married buyers who are purchasing a second or third time have the highest income amongst all buyers at $108,600. In contrast the number of single male buyers was just 9% while the number of single female buyers declined from 16% to 15%.
The median age of first-time buyers was 31 and this has remained unchanged for three years while the median income was $69,400, up slightly from $68,300 in 2014. The typical first-time purchase was a property of 1620 ft.², costing $170,000. A typical repeat buyer had an income of 9$8,700, purchased a property with a median 2020 ft.² that cost $246,400.