First-time buyers may face a difficult spring
This spring, first-time buyers may struggle to find a house. The sheer numbers of homes in the lower-price marketplace is severely limited. Inventory fell 8.2 percent in January from a year earlier for properties priced below $250,000, reported by data from the National Association of Realtors®.Buyers can anticipate steep competition this spring. An index by Redfin that measures requests for property visits rose while in the first two months of the year to its highest level since the brokerage began tracking such data in 2012.
“As soon as a house hits the market, it will be eaten by the huge demand appetite,” Nela Richardson, Redfin’s chief economist, told Bloomberg.
The share of first-time homebuyers in February dropped to 30 percent in February, down from 32% in January but in excess of the 29% a year ago, in accordance with NAR.
“Affordability is a challenge this spring,” says Doug Duncan, Fannie Mae’s chief economist. Potential homebuyers “would have gotten their credit in shape and they’ll have a job. But they will be frustrated because, in their market, there simply won’t be affordable homes.”
What’s more, investor sales have been trending up in recent months, which will add to first-time buyer woes. Investors tend to pay all-cash for their home purchases and compete in the same price range of homes.
“Already facing affordability issues, this competition at the entry-level market only adds to the roadblocks slowing first-time buyers,” says Lawrence Yun, NAR’s chief economist.
