Notable decline in first-time homebuyers, but what are Realtors doing about it?

We just returned from the National Association of REALTORS (NAR) Annual Conference & Expo in New Orleans. Some of the news discussed included the results of their Annual Profile of Home Buyers and Sellers. In fact, the headline of the November 3rd press release highlighted first-time homebuyer challenges: NAR Annual Survey Reveals Notable Decline in First-time Buyers.  

NAR Annual postThe share of first-time buyers dropped 5 percentage points from a year ago to 33 percent, representing the lowest share since 1987 (30 percent). Among 23 percent of first-time buyers who said saving for a down payment was difficult, more than half (57 percent) said student loans delayed saving, up from 54 percent a year ago.

There are solutions, but we know that most first time homebuyers have no idea they exist. We’re referring to the many down payment and closing cost programs that could help their savings go even further—not to mention help keep their retirement savings intact.

The lack of first-time homebuyers is a big issue and one that the entire real estate industry needs to help solve. Housing and consumer data continues to suggest a big disconnect between perceived affordability and real affordability—especially for first-time homebuyers. The fact is there are affordable financing options, available through state and local housing finance agencies and coupled with valuable homebuyer education. keep reading

Let’s move 5.5 million qualified buyers off the sidelines

First-time homebuyer sales are at historic lows, however data from the Harvard Joint Center for Housing Studies (JCHS) shows that in many metro markets more than 50 percent of 25-34 year-old renters have the income and credit scores to qualify for a mortgage today. These sidelined buyers are holding onto the belief that all home loans come with a hefty down payment and stringent qualifications. And, it’s keeping them from investigating their options. Could access to homeownership programs be the answer?

infographic.firstslidedataThere are nearly 2,200 such programs across the country and more than 91 percent are funded and available to eligible buyers. Homebuyer programs can be coupled with affordable FHA and VA loans as well, helping buyers save on their down payment and closing costs. Our Quarterly Homeownership Program Index highlights the diversity of programs available to meet the needs of all types of buyers.

How many renters could qualify?

Let’s take the JCHS data a step further to quantify how many renter households are qualified to buy a home today. According to the Census Bureau, there are 11.1 million renter householders between 25 and 34 years old. And, the JCHS found that on average 50 percent are qualified to buy a home today. keep reading