Tags: first | home | buyers | housing

First-Time Home Buying Lags, May Put Damper on Housing Recovery

Wednesday, 24 Jul 2013 09:20 AM

By Dan Weil

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While the housing market has rebounded with a vengeance since early 2012, sluggish buying from first-time home owners could limit future gains.

Those first-time buyers, who are generally young couples, have accounted for approximately 40 percent of home purchases, on average, over the past 30 years, according to data from the National Association of Retailers (NAR) that appeared in The Wall Street Journal.

But that number has dropped to about 30 percent during the past year, as prices have soared.
The median existing home price in the United States hit $214,200 in June, up 13.5 percent from a year earlier, according to NAR.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

Many potential first-time buyers also have suffered financially from the subpar economic recovery. They are more likely to be unemployed, and have low credit ratings than others, The Journal reports.

The lack of first-time buyers doesn't just limit the housing market. It hurts the economy as well, because it means less home-related purchases, such furniture and renovations.

"First-time buyers are important to get the housing market to move to a new plateau," Steven Ricchiuto, chief economist at Mizuho Securities USA, tells The Journal. "Without them, you just get stuck at a marginal recovery environment."

Still, many experts remain bullish on the housing market. When it comes to investing in rental houses, "the most important thing that we focus on ... are markets with new jobs." Kathy Fettke, CEO of Real Wealth Network, a real estate investment club, tells Newsmax TV in an exclusive interview.

"There are parts of the country that are doing better than others, and that's where housing is going to do well."

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

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