Share of First-Time Homebuyers Plateaued in 2017 As Home Prices Rose

As home prices increased rapidly from 2016 to 2017, the share of first-time homebuyers held steady at 32 percent of all buyers purchasing existing homes. 

First-time homebuyers may have difficulty purchasing a new home, or purchasing a home without being cost-burdened.  According to the National Association of Realtors' research, 25-34 year old households need to be making roughly $70,801 annually to keep household expenses at 25 percent of income, with a down payment of 3.5, 5, or 10 percent. The research also shows that the debt-to-income ratio for this age group is nearly at 30 percent, meeting the commonly-held threshold for cost-burdened homeownership.

Of the 500 metro areas being tracked by Realtor.com, 380 metro areas, or 76 percent, had fewer listings in December 2017 compared to one year ago, and 430 metro areas, or 86 percent, had list prices that were higher than one year ago. Prices continue to increase even in already high-price areas. San Jose-Sta. Clara-Sunnyvale median list price in December 2017 was $1.13 million, up by 30 percent from one year ago, with 33 percent fewer listings.

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