First-time buyers accounted for 26 percent of home purchases in January. This is down from 27 percent in December and 30 percent a year ago, making it the lowest level for first-time buyers since October 2008. This group of buyers should normally be closer to 40 percent of the market.
Why is the number of first-time buyers so low? Several factors are making it difficult for them to purchase a home in today’s market – things like tight credit, limited inventory, higher home prices and higher mortgage interest rates. First-time buyers are also citing student debt as an obstacle to owning a home. An NAR survey showed that, of the first-time buyers who said it was difficult to save for a down payment, 54 percent said student loans made it tough to save money.
Talk to first-time buyers about their experiences, including how they approached the mortgage process and whether they faced any obstacles saving for a down payment. Identify a Realtor® who works specifically with first-time buyers. Ask him or her to share tips and advice on how those buyers can prepare themselves for the home buying process.