According to the National Association of Realtors® (NAR), first-time homebuyers accounted for only 27% of all home sales in December 2013—the lowest level since the NAR started tracking such statistics in 2008.
Factors that may be contributing to diminishing numbers include high student loans, poor credit scores, low employment, and the rise in home prices across the U.S.
Usually, first-time homebuyers purchase lower-priced homes. However, they are facing competition from all-cash investors. Last month, cash purchases represented 42.1% of U.S. homes sales. In November 2013, they represented 38.1%—an increase by 18% year-over-year, according to RealtyTrac.
As mortgage lenders require higher down payments, tight credit is negatively affecting first-time homebuyers. FHA loans, which are the most popular type of loan for first-time buyers, have seen its market share dwindling due to higher premiums and fees.
However, Fannie Mae and Freddie Mac are offering more loans to first-time buyers, according to a report by Inside Mortgage Finance. First-timers accounted for 19.5% of financing in December 2013— a 14.1% increase from December 2012.