Are first-time homebuyers helping to drive the housing market? According to the National Association of Realtors, existing home sales increased in September driven mainly by the drastic incease in first-time homebuyers. This recent Housing Wire article by Kelsey Ramírez shares details from this new report.
Total existing home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 3.2% to a seasonally adjusted rate of 5.47 million in September. This is up from a downwardly-revised 5.3 million in August. Sales are actually at their highest pace since June, and 0.6% above last year’s 5.44 million.
“The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual because of the competition for the minimal amount of homes for sale,” NAR Chief Economist Lawrence Yun said.
“Most families and move-up buyers look to close before the new school year starts,” Yun said. “Their diminishing presence from the market towards the end of summer created more opportunities for aspiring first-time homeowners to buy last month.”
First-time homebuyers increased to 34% of the market share, the highest share since July 2012. It is up from 31% in August and 29% last year.
A new survey from Zillow shows the importance of Millennials in the housing market. This new generation may not only be fueling the housing market, but also changing it, according to the survey.
“There’s hope the leap in sales to first-time buyers can stick through the rest of the year and into next spring,” Yun said. “The market fundamentals – primarily consistent job gains and affordable mortgage rates – are there for the steady rise in first-timers needed to finally reverse the decline in the homeownership rate.”
All major regions saw an increase in closings in September, according to the report. Furthermore, distressed sales fell to a new low of 4% of market sales.
[Read the full article here]