The latest Profile of Home Buyers and Sellers (2015) from the National Association of Realtors® (NAR) contains a stark statistical representation of how difficult it is for young (and possibly not so young) people to buy their first home: only 32% of buyers were first-timers last year. That’s the lowest share since 1987, when it came in at 30%.
The reasons are widely known and discussed: high home prices (and therefore needed down payments), low inventory of homes for sale, underemployment, and high (in many cases crushing) student debt loads.
Is it really so impossible to enter the U.S. real estate market? True, with median home prices across the United States at over $200,000—with some areas of the U.S. far, far above that (such as California, where the median is over $400,000)—we’re talking some serious dollars no matter who you are.
But it may also be that some people have simply been scared out of the market.
For example, Lisa Shaffer, Loan Advisor at RPM Mortgage in Alamo, California, told Nolo that one of the most satisfying things about her work is “when I can help get someone get into a home who doubted they could afford one at all. Some clients of ours have had a good income but not much saved up for a down payment, and we’ve been able to find them first-time buyer programs (either through the government or through niche programs offered by banks) to help them buy a home sooner than they’d thought possible.”
Another hopeful thing about the current housing market is that, while a 20% down payment is widely referred to as the norm, most first-time buyers don’t actually pay that much. The same NAR survey found that first-time buyers are putting an average of 6% down.
For help with the challenges of breaking into the real estate market, see Nolo’s Essential Guide to Buying Your First Home.