Student debt flunking many first-time home buyers
WASHINGTON — They’re not yet an endangered species, but their steadily diminishing presence has some real estate analysts worried: First-time buyers are missing in action in housing markets across the country.
Traditionally first-timers have accounted for around 40 percent of purchases in the resale market. But in May, according to the National Association of Realtors, they were just 28 percent, down from 29 percent in April and 34 percent a year ago.
Big deal? Yes. If predominantly young, first-time purchasers are not entering the home ownership pipeline at anywhere near their traditional rate, at some point the system begins to choke. Owners of modest-priced starter homes find it more difficult to sell and move up. They in turn can’t buy the larger homes they crave, reducing demand for houses in the more expensive categories. A shortage of first-time buyers at the intake level eventually triggers problems all the way up.
Where are these previously dependable first-time homebuyers in their late 20s and early 30s? A new national study released last week offers important clues: A lot of them are carrying such heavy debts from student loans that they’re postponing buying houses. READ MORE HERE