Homing in
Thinking of buying a house? Chances are, probably not — the double effect of nominal US house prices jumping 40% since 2020 and soaring mortgage rates has left many feeling that now is not the time to buy.
There are, however, buyers out there, they just tend to have already been on the ladder for some time. Indeed, new data from the National Association of Realtors reveals that first-time buyers made up just 32% of the US property market this year, down from the 38% average seen since 1981. The median age of a repeat buyer was also revealed to be 58 — slightly lower than last year’s 59 — but still significantly greater than the early 1980s, when the typical person buying for at least the second time was only 36 years-old.
Boomer room
Several factors are driving this shift. For one, more senior buyers are simply more likely to also be selling a house (often for a much greater price than was initially paid), providing them with larger down payments and making their offers on other homes more attractive than those of first-time buyers, who are likely entering the mortgage market at a time when rates are hovering near 7%.
With a housing inventory shortage looming, and analysis revealing the biggest gap between the cost-to-buy and the cost-to-rent in the US in over 50 years, younger buyers may find themselves waiting even longer to make that first home purchase.
