The 1st time buyer is the cornerstone to the housing market. Enjoy this article – I would love to hear your thoughts! I added my 2 cents at the bottom.
Shut Out of the Housing Market? First-Timers Dwindle
First-time home buyers are particularly being hit hard by rising prices and tougher credit standards — and their decreasing market share proves it.
The National Association of REALTORS® reports that first-time home buyers accounted for 26 percent of purchases in January, down from 30 percent a year earlier. It’s also the lowest market share for first-time buyers that NAR has recorded since it began measuring it in 2008.
The falling number of first-time home buyers has the potential to slow the pace of the recovery, Bloomberg reports. The decline of first-time home buyers is hampering home sales, which dropped 5.1 percent in January compared to a year earlier, NAR reports.
“It’s a huge problem,” says Leslie Appleton-Young, chief economist for the California Association of REALTORS®. “We have a ladder of home ownership and need first-time home buyers beginning the process of owning, building equity, and trading up to have a healthy housing sector.”
Some housing advocates are blaming investors for pushing out home buyers, particularly where first-time home buyers are being outbid by investors offering all-cash offers. Nearly 80 organizations are calling on federal regulators to address investors pushing potential home buyers out of the market, reports the California Reinvestment Coalition. They argue that federal housing agencies conducting bulk sales of foreclosed homes and distressed mortgages have heightened the problem.
“We’re ringing the alarm bell now and asking regulators to act,” says Kevin Stein, associate director of the California Reinvestment Coalition. “Wall Street and other cash investors are making it harder for families to buy their first house, for renters to stay in their communities, and for neighborhoods to recover.”
The housing advocates are asking for greater oversight from federal regulatory bodies, such as with more oversight of new investor landlords and ensure that banks aren’t favoring investors over home buyers with FHA loans in REO purchases. The group is also asking for greater research on the disparate impact of REO properties on various communities, particularly the impact to minority communities. Read more about the housing advocates’ stance at the California Reinvestment Coalition website.
Source: “Americans Shut Out of Home Market Threaten Recovery: Mortgages,” Bloomberg Businessweek (March 5, 2014) and “80 Organizations Ask Federal Government to Address Investor Cash Flooding Into Neighborhoods,” California Reinvestment Coalition (March 4, 2014)
Read More
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My 2 cents. When prices were as low as they were going to go – I remember contacting all the buyers I met 10 years ago to let them know there were homes in their price ranges. Sadly, offer after offer, the 1st time buyers, with loans, were being outbid by investors – or underbid, but out timed by cash investors. I watched homes sell so darn low to investors, foreign and domestic, my heart hurt. Here was the opportunity for 1st time buyers, who planned on staying put for 10 years and working on their home – and they couldn’t buy because of the competition. Now there are plenty of rental properties, but here in the Bay Area the rents are just as high as the mortgages. I’m sad to see 1st time buyers forced to move away just to buy a home. And that is no good for growth or our area or our housing market. Without a first time buyer – there is no second time buyer and so forth. It will be interesting to see how this effects us.
I read this article at: http://realtormag.realtor.org/daily-news/2014/03/06/shut-out-housing-market-first-timers-dwindle?om_rid=AACmlZ&om_mid=_BTGMphB84q$cpc&om_ntype=RMODaily
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