Posted on July 29, 2013 by Anthony Bird - Buying a Home, First Time Home Buyer, Mortgage Tips

What’s going on with the first time homebuyer?

It is hard to decipher the recent housing number reports as all of the first time home buyer seem to be disappearing. Because of recent market changes the May housing report is at it’s highest numbers since May 2006. Bloomberg, also reported that mortgage applications have sunk to their lowest levels in 19 months. One important note that helps explain this is The National Association of Realtors has reported that 33% of all new home sales are from cash buyers. It stands to reason that barely any of these new first time home buyers took part in buying a house for cash though. The first time home buyer has always been a cornerstone piece of the real estate market. The real estate market is not a strong real estate market without the first time home buyer.

The numbers indicate that there are fewer and fewer first time homebuyer’s. Why is that?

Most seller’s who are moving up in house will not be able to buy there next home unless a first time homebuyer buy’s there home. If there are fewer and fewer first time homebuyers then the seller trying to move up in house will not be able to sell their home. Since first time homebuyers only accounted for 28% of the total sales in May fewer 2nd time homebuyers are having the opportunity to move up in house. Typically, first time homebuyers account for 40% of the total sales in May. Jobs may be the main reason why there are so few first time homebuyers. Others say that sticker lending guidelines and rapidly rising rates may be the reason.