After a boost in market activity during the final months of 2020, the share of first-time buyers fell to 26% in November 2021, the lowest level since January 2014, according to the National Association of Realtors. First-time buyers are entering an unprecedented market during the aftershock of the COVID pandemic, and because of subsequent price growth and competition from all-cash buyers, many are walking out empty handed.
From January to November 2021, the median existing-home sales price reached an average of $345,442, a 16.4% year-over-year increase. As a result, nearly 1 million renter households were priced out of the market, driving down the share of first-time buyers.
There are a variety of factors that influence the decision of first-time buyers to make a home purchase and to be successful in their offer. However, affordability and ability to compete with other buyers are arguably important factors.
Under historically low mortgage rates and supply bottlenecks, demand has outpaced the supply of homes available on the market, resulting in double-digit price appreciation. NAR’s latest November existing home sales data showed an uptick in the median existing home sales price to $353,900, a 13.9% year-over-year increase.
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