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First-Time Housebuyers Not Riding the Wave of Recovery

By Patrick   2012 Nov 27, 11:54am   837 views   3 comments   watch (0)   quote

Despite growing signs that the housing market is starting to recover from the depression-like conditions of the past few years, first-time homebuyers don’t seem to be benefiting from that recovery. According to the latest Campbell/Inside Mortgage Finance HousingPulseTracking Survey results, the first-time homebuyer share of home purchases fell to 34.7 percent in October. That was not only down from the 37.1 percent share seen as recently as June, but also the lowest first-time homebuyer share ever recorded in the HousingPulse survey. The decline in first-time homebuyers participating in the housing market comes at the same time that purchases of non-distressed properties...


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1   EastCoastBubbleBoy     2012 Nov 27, 12:09pm  ↑ like   ↓ dislike   quote    

If this trend continues, how will it impact the overall market?

Will it mean lower prices, or will the "starter" homes simply be gobbled up by investos, which seems to be becomming more commonplace?

2   errc   452/459 = 98% civil   2012 Nov 27, 12:10pm  ↑ like   ↓ dislike   quote    

Fthb tax credits pulled forward all of todays demand, duh.

But noone could possibly have forseen that happening, right?

3   tannenbaum     2012 Nov 27, 2:39pm  ↑ like   ↓ dislike   quote    

Call it Crazy says

EastCoastBubbleBoy says

Will it mean lower prices, or will the "starter" homes simply be gobbled up by investos, which seems to be becomming more commonplace?

I believe it hurts the recovery because the starter homes are being sucked up by investors as rentals. No lower end starter homes for the recent grads or newlyweds. They can't afford mid priced houses.

It has a domino affect. If the first time buyers can't get started, then they won't have something to sell later to move up to when their families grow. Plus, their move up usually includes buying houses the boomers are selling so they can down size. Boomers can't sell if there are few move up buyers.

So, by artificially keeping the first time buyers out of the game, it has a negative affect all the way up the housing chain.

Not to mention that most young people are saddled with student loan debt. And, how is anybody supposed to save for a down payment when you are lucky to earn 0.5% in a money market account and the rent on your apartment just went up another 10%?

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