It's still tough out there for first-time homebuyers, and will probably stay that way for a few more years
homebuyerswill probably continue struggling to buy a home for a few more years.
- It'll likely take until 2025 for first-time buyers to regain market share, a
It's still tough out there for first-time homebuyers, and it's expected to stay that way for a few more years.
This hits first-time buyers especially hard, because they often don't the cash reserves of other buyers. And in fact, the share of first-time buyers has significantly decreased over the past few years: those buyers made up 43% of the market in 2020, but only 37% in 2021, according to Zillow.
Data from the National Association of Realtors paints an even starker picture: As of January 2022, first-time buyers represent just 27% of the market.
And according to the majority of Zillow's panel of experts, it'll take until 2024 or 2025 for the share of first-time buyers in the market to hit pre-pandemic levels once again — and another 18% don't believe the share of first-time buyers will hit 45% or more until 2030, even though millennials will be "aging well into their prime home-buying years before that time," Jeff Tucker, Zillow's senior economist, wrote in the report.
In the meantime, first-time buyers are growing frustrated. Courtney Zaelit, a first-time homebuyer from Bedford, Texas, told Insider that she feels buyers like her are at a disadvantage in the current market. Zaelit recently gave up on buying a house after making an offer on her dream home and getting outbid.
"I felt defeated," she said.
Brianna Lombardozzi, a prospective buyer in Central, South Carolina, told Reuters that the process made her feel defeated too. Lombardozzi recently had four bids rejected and is running out of time to find a home before her lease is up in May, Reuters reported.
And as mortgage rates rise and the median home price hits a record high of $392,000, finding an affordable home can feel extra daunting for buyers: A 20% down payment for a home that price is more than $75,000 right now.
A recent TD Bank survey found that affordability remains the biggest hurdle for potential homeowners, with 46% citing saving for a down payment as the biggest hangup.
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