First time buyers represented a record low share of home purchases in the 12 months ending in July 2015, the National Association of Realtors reported in an annual survey.
The 2015 Profile of Home Buyers and Sellers found first time buyers made only 32% of home purchases during that period. First time homebuyer market share was 33% in 2014; the July 2015 figure was the second lowest since the association's first survey in 1981.
The NAR said the lowest first time homebuyer market share of 30% was reported in 1987. The average market share for first time buyers is 40%, the association reported.
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"There are several reasons why there should be more first–time buyers reaching the market, including persistently low mortgage rates, healthy job prospects for those college–educated, and the fact that renting is becoming more unaffordable in many areas," NAR Chief Economist Lawrence Yun said. "Unfortunately, there are just as many high hurdles slowing first–time buyers down. Increasing rents and home prices are impeding their ability to save for a down payment, there's scarce inventory for new and existing homes in their price range, and it's still too difficult for some to get a mortgage."
Yun said the survey offered clues why first time buyers were absent from the market. Debt in all forms delayed their ability to save for a down payment for a median of three years. He also observed of the 25% who cited difficulty saving for a down payment, more than half (58%) blamed student loan debt.
"With a median amount of student loan debt for all buyers at $25,000, it's likely some younger households with even higher levels of debt can't save for an adequate down payment or have decided to delay buying until their debt is at more comfortable levels," Yun added.
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