1. First-time Buyers are Scarce. The first-time buyer share of the market dropped to 26% over the past year. Historically, first-time buyers buy around 40% of homes. The reason was the high prices and the rise in interest rates. Hopefully the price correction occurring in most markets will reverse that trend. 2. First-Timer Buyers are Getting Older. The age of first-time home buyers rose to 36, a record high. Again affordability and interest rates were factors, together with car, credit card and student loan debt, which is delaying entrance into home ownership. 3. Buyers Remain Sensitive to Rates. Total mortgage application volume fell 7.7% in the third week of February compared with the previous week because the average 30-year fixed mortgage rate for loans of $726,200 or less increased to 6.39% from 6.18%. Increases in rates raise payments which obviously has a negative effect on the ability of buyers to qualify for a loan. Next: Part Two.
