First-Time Buyers Struggle to Compete With Investors and Vacation Home Buyers

All-cash offers and non-primary residence buyers are pushing more first-time buyers out of the market
Nov. 24, 2021
2 min read

First-time buyers are struggling to keep up with all-cash offers and non-primary residence buyers as low housing supply keeps market competition tight. First-time buyers accounted for 29% of existing home buyers for the month of October, down from 32% a year ago. On the contrary, the share of cash sales and non-primary residence buyers rose on a monthly and yearly basis, according to the National Association of Realtors. Buyer activity slowed in October compared to the prior month as well as the previous year.

First-time buyers continue to struggle to compete with cash and non-primary residence buyers, according to the October 2021 REALTORS® Confidence Index report. First-time buyers accounted for 29% of the existing-home buyers, a lower fraction compared to one year ago (28% in the prior month, 32% one year ago). The share of cash sales rose to 24% (23% in the prior month, 19% one year ago). The share of non-primary residence buyers (for rental and vacation/second home use) rose to 17% (13% in the prior month, 14% one year ago).

REALTORS® reported subdued market activity in October compared to one year ago and the prior month. The REALTORS® Buyer Traffic Index decreased further to 56 in October (57 in the prior month, 73 one year ago). Housing supply remains low, with the REALTORS® Seller Traffic Index registering at below 50 ("weak" seller traffic compared to one year ago).

Read More

Sign up for Pro Builder Newsletters
Get the latest news and updates.

Related

14115451 © Stephen Mcsweeny | Dreamstime.com
Home for sale
146886985 © Dragan Andrii | Dreamstime.com
Concept of rising home prices