First-time home buyers, where art thou?
We knew younger adults were skittish about buying their first home, but this might border on paranoid. Data out Monday from the latest annual survey of the nation's housing market by the National Association of Realtors show the share of first-time buyers dropped 5 percentage points from a year ago to 33 percent. That's the lowest share since 1987 (30 percent) and well below the typical 40 percent that first-timers have represented since 1981.
Who can blame them?
Many potential first-time buyers are stuck in lower-wage work, burdened with student loans and daunted by today's higher down payment and tougher mortgage requirements. Many more question the risk-versus-reward of homeownership after witnessing the burst housing bubble. They know friends who still owe more on their mortgage than their homes are worth, and heard of too many foreclosure nightmares — especially in Florida.
Is this decline in first-time home buyers a short-term blip or larger demographic trend? Younger adults for now are delaying marriage and parenthood, factors that often drive people to switch from the flexibility of renting to owning a home. Here are some telling numbers about first-timers from this year's NAR survey.
47: Percent of first-time buyers (up from 43 percent in 2013) who say that, despite low interest rates, the mortgage application and approval process is "much more" or "somewhat more" difficult than expected. No surprise, the Realtors group urges easing lending standards made tougher since the anything-goes era that resulted in the 2006-2008 housing crash. Sounds good — if Congress and regulators don't overdo it again. This country has not been smart in recent decades about taking a sip instead of guzzling the whole bottle.
31 and $68,300: Median age and income of this year's first-time buyer. These figures are stable. The typical repeat buyer is 53 and earned $95,000.
1,570 and $169,000: Size in square feet and price of the typical first-time home. Repeat buyers typically bought a 2,030-square-foot home for $240,000.
6: Percent, the median down payment for first-time buyers.
81: Percent of first timers who tapped their own savings for a down payment.
26: Percent of first-timers who received a gift from a friend or relative — most likely their parents.
10: Number of years first-timers intend to stay in their home.
Despite the decline in first-time buyers, Florida gets decent marks in WalletHub's 2014 survey of "best and worst" cities.
The Tampa Bay market, for example, ranks 59th overall out of 300 metro areas nationwide for first-timers. While this metro area ranked a poor 174th for affordability, it ranked a more impressive 14th for "community" attributes, which include everything from weather and taxes to crime and recreation.
Contact Robert Trigaux at firstname.lastname@example.org.