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The characteristics of first-time home buyers are shifting as homeownership grows more unaffordable and out of reach for many, the new annual report says.
The share of first-time buyers in the market hit an all-time low during a survey period from July 2021 through June 2022, according to the National Association of Realtors (NAR), dropping from 34% last year to 26%. (The NAR has been publishing its annual report since 1981.)
At the same time, buyers also grew older and whiter, the NAR said, with the ages of both first-time buyers and repeat buyers reaching new highs of 36 years old and 59 years old, respectively.
“‘Those who have housing equity hold the cards and they have fared very well in the current real-estate market.’”
— Jessica Lautz, vice president of demographics and behavioral insights at the NAR
And Black Americans, who were already facing a racial homeownership gap so severe that it surpassed the disparity between Black and white homeownership seen in 1960, comprised the second-smallest share of buyers at 3%. Asians, meanwhile, accounted for just 2% of buyers, though the share of Hispanic buyers gained slightly from 7% in 2021 to 8% in the survey period.
White people otherwise made up the vast majority of buyers at 88%, up from 82% a year ago.
Affordability and limited inventory affected all buyers, but “the greatest impact was felt by Black and Asian Americans, as both groups saw a shrinking share of home buyers,” Jessica Lautz, vice president of demographics and behavioral insights at the NAR, said in a statement.
“Conversely, White and Hispanic Americans experienced gains in buyer shares,” she added. “Population growth among Hispanic Americans likely drove the increase, while many White Americans are repeat buyers with housing equity that allows them to make easier trades in today’s market.”
Home buyers were often purchasing their homes for 100% of the asking price during the survey period, according to the NAR, and 28% bought their homes for more than the asking price. Fewer buyers — 78% — also had to finance their home purchase compared to the year prior, since more repeat buyers were paying entirely in cash.
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