May 1st, 2013
The housing market is in recovery mode, and continues to improve . There are many contributing factors to the recovery – including low interest rates, an improving job market, rising home prices – but in order for conditions to continue bettering, experts note the housing market must find a way to accommodate first-time buyers and their needs.
“First-time homebuyers are a catalyst for the rest of the market,” Coldwell Banker Realtor Cara Ameer told U.S. News and World Report. “They’re really the domino that triggers other buyers – they have a contagion effect.”
The source reports there are several factors preventing first-time buyers from entering the housing market. For one, data compiled by U.S. News and World Report indicates the average American in their 20s has about $30,000 in student loan debt alone, making it difficult to secure a down payment. A lack of available properties further hinders the first-time buyer – the deluge of foreclosed properties have long since ended, and those whose homes did not go underwater are staying put in their existing homes.
There have also been signs of a cultural shift away from valuing owning a home as the paragon of the American dream. Forbes reports that more people regard long-term renting as acceptable, and with tightened restrictions and credit in mortgages, renting has had to become more acceptable for those with young families across the country.
Even as some accept renting as a viable long-term option, first-time buyers still make up 40 percent of the buyer pool, giving hope to investors and current homeowners alike. A recent survey by real estate information portal Doorsteps found that the average homebuyer is 31, with an average income of $61,800. Fifty-five percent of average first-time buyers are married; 19 percent are single females; 11 percent are single males and 14 percent are unmarried couples.
When it comes to what first-time buyers are looking for, location is most important. In order to stay in a preferred location close to choice schools in safe neighborhoods, 20 percent of those surveyed said they would sacrifice the overall size of their property.