An Extra-tight Housing Market is Pinching First-time Homebuyers

According to a recent article in Utah Business magazine, first-time homebuyers are feeling the pinch from low inventory across the nation. While the housing market is recovering, it hasn’t recovered to the point where people are clamoring to sell their homes.

The article explains, “With high prices, low inventory and developers unwilling or unable to build new affordable properties, first-time homebuyers have felt stymied at every turn.”

According to Chris Jensen, president of Coldwell Banker Residential Brokerage, first-time homebuyers used to make up as much as 45 percent of the market, but that number has now decreased to around 36 percent.

The drop can be attributed to several factors. Take for example, millennials. Young adults, the largest percentage of new home buyers, are steering away from entering the housing market for a variety of reasons ranging from high student loan debt to the flexibility afforded by renting. The good news is, Jensen cites that most real estate professionals believe millennials will enter the market within the next few years. And we can see some Utah markets already bucking the trend, such as Provo, where CNN Money recently reported that 49{b0691beea1c2f39bd1c58efe4ba0816740a602e2685bc83cc0a70ecfa3fcdf10} of mortgages are held by millennials.

The more pressing problem, says Jensen, is inventory. Without more inventory there wont be anything for millennials to buy once they’re ready.

Jensen goes on to discuss the potential impact of Utah’s expected explosive population growth, as well as the hand developers and new construction are playing in the first-time homebuyer market.

Click here to read the full article.

By |2015-10-29T15:39:37-06:00October 15, 2015|

About the Author:

Gina Uriarte is an avid traveler and enjoys rock climbing, hiking, sporting events and live music. Gina has been in the marketing field for the real estate industry since 2005 and most enjoys the creative side of her craft. When not working or planning her next trip, Gina can be found sharing her musings on music, design and sports 140 characters at a time over on Twitter. Feel free to tweet her, as she is quick to respond.

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