Columbus OH Home Search: First-Time Home Buyer Activity on the Decline

First-time home buyers accounted for just 27% of home sales nationally in December, the lowest since the National Association of REALTORS® began tracking them in 2008. Typically, first-time home buyers account for approximately 40% of the market.

Why are their numbers dwindling? Housing experts point to several hurdles, such as: high student loan debt, less-than-perfect credit, low employment and wage growth, and the double-digit growth in home prices this past year.

First-time home buyers tend to purchase lower-priced entry level homes, but they’re facing competition for those homes from all-cash investors. Cash purchases accounted for 42.1% of all U.S. home sales in December, up from 38.1% in November, and up from 18% one year prior.

Tight credit is also preventing younger home buyers from qualifying for a mortgage to buy a home, as mortgage lenders require higher down payments. FHA loans, which many first-time home buyers turn to for the low down payment requirements, have seen their market share decrease recently after an increase in premiums and fees this year made them less attractive to some.

However, Fannie Mae and Freddie Mac are lending more to first-time buyers, according to a report from Inside Mortgage Finance. The share of financing for first-time home buyers by the mortgage giants reached 19.5% in December, up from 14.1% a year prior.

If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!