Investor activity down, more chances for first-time homebuyers
Posted on Wednesday, September 11, 2013 at 2:04:36 PM
For many reasons, including rising debt levels and a lack of well-paying employment, some first-time buyers are having trouble breaking into the housing market.
Affordable residential financing is key for boosting this segment, and more professionals are concerned about the overall affect a lack of novice buyers could have on the sector. However, real estate investors - a group that could hamper first-time activity - appears to be declining, opening up more opportunities.
Investor demand is down, according to Reuters. Thanks to previously cheap prices, many large firms spent billions of dollars on bulk single-family home purchases, taking away properties from other buyers.
"Investors helped stabilize a housing market that was in free-fall and they did so by taking advantage of fire-sale home prices," Michael Feroli, chief U.S. economist at JPMorgan Chase & Co, told the news source. "Now you see few fewer bargain prices in the market and that's a reason investor demand is coming off its peak."
Experts are concerned about the small amounts of young adults buying, according to HousingWire. Investors are typically an impediment, as is the perception of homeownership. Mobility is a big plus for younger Americans as well, and some are choosing other housing options.
First-time homebuyers are a segment that should be improving, and hopefully access to residential financing could help motivate more people to look into real estate.