First-time home buyers’ market share fell this year, slipping one percentage point from 2012 and down from a long-term average of 40%. The market share for single home buyers is also on the decline as credit standards tighten, according to a study released Monday.
Over the long term, four out of 10 home buyers have been first-time purchasers, according to the National Association of Realtors Profile of Home Buyers and Sellers. Last year, that number was slightly below the long-term average at 39%. This year, the market share slipped to 38%.
“The share of first-time buyers appears to be only modestly below normal, but we have to keep in mind that investors have been more active in recent years, and they’re not included in these results,” said NAR Chief Economist Lawrence Yun. “Historically, first-time buyers are instrumental in housing recoveries because they help existing home owners sell and make a trade.”
The median age for first-time buyers was 31, according to the report. The typical first-time buyer purchased a $170,000 home.
The percentage of single home buyers is also on the decline as mortgage lenders give preference to dual-income families, according to the report. In 2010, single buyers accounted for 32% of the market. That number was down to 25% in both 2012 and 2013.
“Single home buyers have been suppressed for the past three years by restrictive mortgage lending standards, which favor dual-income households who are more likely to have higher credit scores,” Yun said. “…Given that mortgage interest rates are expected to gradually rise, we need greater access to credit for a sounder housing recovery. Affordability conditions remain favorable in much of the country, but consumers need access to safe and sound financing, particularly the 30-year fixed-rate mortgage, and with low down payment options for first-time buyers.”