Soaring home prices and the shortage of properties on the market are taking a toll on buyers, particularly first-time buyers.
The share of first-time homeowners fell to just 29% of all existing home buyers in January, according to the most recent National Association of Realtors® report. That’s down from 32% in December and 33% in January 2017.
“First-time buyers are typically people with a tighter budget,” says realtor.com® Senior Economist Joseph Kirchner, who worries this could further depress homeownership rates down the line. “They’re looking for homes on the more affordable end of the market, but that is where the lack of homes is most severe.”
Nationally, the dearth of inventory also drove down the number of existing homes sold, 5.38 million overall, in January. (Existing homes have previously been lived in.) Monthly sales dropped 3.2%, while annual sales decreased 4.8%.
(Realtor.com looked only at the seasonally adjusted numbers in the report. These have been smoothed out over 12 months to account for seasonal fluctuations.)
“There’s plenty of demand, but people just cannot find a home on the market that meets their needs and they can afford,” Kirchner says. “It’s not a good start for the spring market. The shortage will continue.”
Across the country, there were 15.5% fewer existing homes in January selling for $250,000 or less compared with a year ago. Meanwhile, there were 25% more selling for $500,000 or more.
In January, sales of…