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