The share of sales among first-time buyers rose to 35% after three years of decline, according to the NAR. That’s the highest level since 2013, and a boost from 2015’s 30-year low of 32%.
“Young adults are settling down and deciding to buy a home after what was likely a turbulent beginning to their adult life and career following the Great Recession," said Lawrence Yun, NAR chief economist. “Demand increased over the past year because of a robust job market for those with a college degree and renter fatigue at a time when homeowners continue to see their equity rise. These factors were why more first-time buyers (67%) said a desire to own a home of their own was the primary reason for their purchase (64% in 2015; 53% in 2014). Even with the affordability challenges many buyers face, the allure of homeownership is not lost among the younger generation. Those under age 35 made up 61% of first-time buyer transactions.”
While the uptick in first-time buyers is a welcome change, Yun said their overall market share was still subpar. Yun blamed the lack of affordable inventory, home prices rising above wages in many markets, and difficulty in saving for down payments for the sluggish market among young buyers.
“First-timers’ ability to enter the market more convincingly over the next year greatly depends on supply improvements at the lower end of the market and if wages can finally waken from their sluggish pace of growth,” he said.
Single women are also making up a bigger share of the market. Last year, single women made up 15% of the market – tied for the lowest share since 2002. This year, their share rose to 17%, the highest since 2011’s 18%.
“Despite having much lower income ($55,300) than single male buyers ($69,600), female buyers made up over double the amount of men (7%),” Yun said. “Single women for years have indicated a strong desire to own a home of their own, as well as an inclination to live closer to friends and family. With job growth holding steady and credit conditions becoming somewhat less stringent than in past years, the willingness and opportunity to buy is becoming more feasible for many single women.”
Home sales are seeing a rebound among first-time home buyers and single women after several years of decline, according to new data from the National Association of Realtors.