The housing recovery has been slowly improving as more people invest in the industry. The recovery isn’t soley recovered by homes being bought but also by more people hiring Lynchburg home inspectors, realtors, construction companies, etc. If everyone in the industry is being supported then it allows for a more healthy recoverty. However, there is one big part of the sector that isn’t as impactful as previous years. First-time homebuyers have not been prevalent during the housing recovery, representing less than a third of all buyers each month for the past two years.
The National Associate of Realtors pointed this out in their report released today on “pending home sales” — or contract signings that have yet to close.
Realtors say investors are retreating from the market as fewer distressed homes, or bargain deals, become available. That makes the role of first-time homebuyers more vital to the housing recovery. The first time buyers aren’t as likely to buy a fixer-upper as their first house as it is too much effort. They are looking for structurally sound buildings that don’t need any work done to them and will get a building and pest inspection Gold Coast for their potential house to make sure this is the case.
Contract signings slowed modestly in August but remain at their second-highest level over the past year, The NAR said.
Lawrence Yun, NAR chief economist, said first-time buyer participation should improve gradually over the next few months, despite tight credit conditions and an expected rise in interest rates.
“The employment outlook for young adults is brightening and their incomes finally appear to be rising,” Yun said. “Jobs and income gains will help repay student debt and better position first-time buyers, setting the stage for improved sales growth in upcoming years.”
The Realtors’ Pending Home Sales Index, fell 1.0 percent to 104.7 in August, from 105.8 in July, and is now 2.2 percent below August 2013 (107.1).
Despite the slight decline, the index is above 100 – considered an average level of contract activity – for the fourth consecutive month and is at the second-highest level since last August.
“Fewer distressed homes at bargain prices and the acknowledgement we’re entering a rising interest rate environment likely caused hesitation among investors last month,” Yun said. “With investors pulling back, the market is shifting more towards traditional and first-time buyers who rely on mortgages to purchase a home.”
Overall, Yun forecasts existing-homes sales to be down 3.0 percent this year to 4.94 million, compared to 5.09 million sales of existing homes in 2013. The national median existing-home price is projected to grow between 5 and 6 percent this year and 4 and 5 percent next year.