Percentage Of First-Time Homebuyers Reaches Historic Low: What You Need To Know

The number of first-time homebuyers in the U.S. housing market has fallen to a historic low, according to new data published by the National Association of Realtors.

What Happened: The latest edition of the Realtors Confidence Survey reported the share of first-time buyers fell to 26% in November, down from 29% in October and down from 32% in November 2020. This is the lowest level since January 2014, which was also 26%, and it marks the lowest share since NAR began tracking the monthly percentage of first-time homebuyers in October 2008.

NAR also noted that within the mortgage finance space, the share of Federal Housing Administration loans — a popular product used by many first-time homebuyers — fell to 11% in November, down from 14% in October and down from 15% one year ago.

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What Else Happened: Complicating matters for first-time homebuyers is the still-soaring price of properties for sale.

According to data from the brokerage Redfin RDFN, the median home sale price rose 14.6% year-over-year to a new all-time high of $361,171 during the four-week period ending Dec. 26. While prices continued to rise, active listings fell 26.1% year-over-year to an all-time low and were down 44.8% from pre-pandemic 2019.

Redfin Deputy Chief Economist Taylor Marr noted that homebuyers who purchased properties over the holiday season “paid high prices due to the ongoing supply shortage.”

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