The Struggles of First-Time Home Buyers
First-time buyers' share of existing-home sales was 28% in May, down from 34% in 2012. What does it mean? Competition from investors, tight credit, personal finances are all obstacles. First time buyers, unlike others, struggle more with saving a down payment, credit blemishes, and income not rising as fast as home prices. So why does it matter? First time buyers play a critical role in housing recovery, allowing current owners to move up. With rent rising, it is more affordable to buy than to rent in most markets. These younger folks may have to be spending more than the advised 30% of their income on rent, translating to less disposable income to help the local economy. Fast forward a few years, and waiting longer to buy a home translates to having less time to build home equity, a nest egg, and a financial safety net.
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