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First-time homebuyers found a tough housing market this year
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The S&P Core Logic Case Shiller Index is expected to show the housing market cooled off a teeny bit in October, but with prices still significantly higher than a year ago — around 18%.
That’s making it tough for first-time homebuyers.
First-time homebuyers made up about one-quarter of the market last month, according to the National Association of Realtors. That’s a historic low point, according to association economist Gay Cororaton.
“Homeownership is critical to wealth building. And it’s part of the American dream,” she said.
She estimates that roughly a million first-time buyers have been pushed out of that dream, as housing prices have spiked.
Wages have gone up too, but not fast enough to help first-time buyers save the large sums needed for a downpayment, said Odeta Kushi, chief economist at First American Financial.
“Because they don’t have the money from the sale of an existing home to bring to the closing table,” Kushi said.
It’s also difficult for them to compete with all-cash buyers, per professor Richard Green at the University of Southern California.
“They can just promise a seller that they’ll close within ten days and that’s very appealing,” Green said.
National Association of Realtors data show cash sales have become increasingly common in 2021.
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