Young homebuyers are still finding it hard to enter the market, even though existing home sales are growing at the fastest rate in more than eight years. First-time homebuyers’ share of the market declined in July to its lowest level since January of this year, marking a second straight month decline, according to the National Association of Realtors.
“The fact that first-time buyers represented a lower share of the market compared to a year ago even though sales are considerably higher is indicative of the challenges many young adults continue to face,” Lawrence Yun, NAR chief economist, said in a statement. “Rising rents and flat wage growth make it difficult for many to save for a down payment, and the dearth of supply in affordable price ranges is limiting their options.”
Inventory down, prices up
Meanwhile, existing-home sales are still growing. NAR reports that single-family home, townhome, condo and co-op sales rose 2% in July and are more than 10% greater than one year ago — the highest rate since February 2007.
The growth in sales is shrinking the number of homes available for purchase, now 4.7% lower than a year ago. And prices continue to rise, with the median existing-home price in July at $234,000 — 5.6% above one year ago.
“Despite the strong growth in sales since this spring, declining affordability could begin to slowly dampen demand,” Yun said. “Realtors in some markets reported slower foot traffic in July in part because of low inventory and concerns about the continued rise in home prices without commensurate income gains.”
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