Over the past few years, first-time homebuyers have been inundated with bad news, bad luck, and bad everything else. Finally, though, things have taken a turn for the good. The share of first-time buyers who purchased homes in June 2016 was the highest recorded in four years (since July 2012!), according to the latest National Association of Realtors’ Existing-Home Sales report.
For the first half of the year, first-time buyers made up 31 percent of all homebuyers. June experienced a small increase in that number, with first-time buyers representing 33 percent of all homebuyers.
“The modest bump in June sales to first-time buyers can be attributed to mortgage rates near all-time lows and perhaps a hopeful indication that more affordable, lower-priced homes are beginning to make their way onto the market,” said NAR’s chief economist, Lawrence Yun.
“The odds of closing on a home are definitely higher right now for first-time buyers living in metro areas with tamer price growth and greater entry-level supply — particularly areas in the Midwest and parts of the South.”
In addition to the increase in first-time buyers, total existing-home sales were up 1.1 percent in June, reaching a seasonally adjusted annual rate (SAAR) of 5.57 million, and increase from May’s numbers (5.51 million) and a huge increase from last June (5.41 million). This is the highest annual pace since February 2007’s SAAR of 5.79 million.
But what’s causing this extraordinary growth? Yun has a theory: “Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home despite many competitive areas with unrelenting supply and demand imbalances. Sustained job growth as well as this year’s descent in mortgage rates is undoubtedly driving the appetite for home purchases.”
For more details on June’s numbers, check out the full report on the NAR website.