home buyers and sellers; the series dates back to 1981. Results are representative of owner-occupants and do not include investors or vacation homes.
The long-term average in this survey, dating back to 1981, shows that four out of 10 purchases are from first-time home buyers. In this year’s survey, the share of first-time buyers dropped 5%age points from a year ago to 33%, representing the lowest share since 1987 (30%).
Lawrence Yun, NAR chief economist, says there are many obstacles young adults are enduring on their path to homeownership.
“Rising rents and repaying student loan debt makes saving for a down payment more difficult, especially for young adults who’ve experienced limited job prospects and flat wage growth since entering the workforce,” he said. “Adding more bumps in the road, is that those finally in a position to buy have had to overcome low inventory levels in their price range, competition from investors, tight credit conditions and high mortgage insurance premiums.”
Yun said that he sees some problems being alleviated going forward.
“Stronger job growth should eventually support higher wages, but nearly half (47%) of first-time buyers in this year’s survey (43% in 2013) said the mortgage application and approval process was much more or somewhat more difficult than expected. Less stringent credit standards and mortgage insurance premiums commensurate with current buyer risk profiles are needed to boost first-time buyer participation, especially with interest rates likely rising in upcoming years.”
The household composition of buyers responding to the survey was mostly unchanged from a year ago. Sixty-five% of buyers were married couples, 16% single women, 9% single men and 8% unmarried couples.
In 2009, 60% of buyers were married, 21% were single women, 10% single men and 8% unmarried couples. Thirteen% of survey respondents were multi-generational households, including adult children, parents and/or grandparents.