The market share of first-time homebuyers in May has dropped two percent from both April 2016 and on a year-over-year basis from May 2015 and now rests at 30 percent. Some of the major reasons for the drop are a lack of supply, especially of affordable homes, difficulty in qualifying for a mortgage, and the inability to make a down payment, the Economists’ Outlook Blog reports.
Even with the very low interest rates, first-time buyers are still finding great difficulty in purchasing a home. In the National Association of Realtor’s 2016 Q1 Housing Opportunities and Market Experience Survey of U.S. households, 63 percent of respondents who do not currently own a home said it would be difficult to qualify for a mortgage given their current financial situation.
Between January 2012 and April 2016, the median family income increased by 10 percent. During that same time period the median price of an existing home increased by 45 percent. Student debt has also caused many people to put off buying a home, despite the fact that education tends to increase the odds of eventually owning a home.
For a full analysis of the report and for accompanying graphs and charts, click the link below.
