Young, first-time buyers are struggling to purchase a home. With low inventories of homes for sale, young first-timers are finding themselves competing against bidders willing to pay cash. Meanwhile, many young buyers are having trouble qualifying for a loan, often due to high student loan debt.
Overall, young buyers have been left out of the housing recovery more than any other age group, according to a new USA Today analysis. The home ownership rate for 25 to 34 year olds has gone from 46.7 percent in 2006 to 29.7 percent in 2011 — a decline of 7 percentage points. As comparison, the 45-54 age group has seen home ownership rates fall 3.8 percent.
National home ownership rates during the same timeframe has fallen 2.7 percentage points — from 67.3 percent to 64.6 percent, USA Today reports.
The median age of first-time home buyers was 31 in 2012, according to National Association of REALTORS® data. First-time home buyers are viewed as critical to a healthy housing market, allowing older Americans to purchase their next home and helping to stimulate new-home construction.
But the number of first-time home buyers has been steadily falling in recent years. In May, first-time buyers accounted for 28 percent of existing-home purchases — a drop from 34 percent a year ago, according to NAR.
Source: “Housing recovery leaves Millennials behind,” USA Today (July 17, 2013)