First-Time Homebuyers Are Getting Crushed in a Cutthroat U.S. Market

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First-Time Homebuyers Are Getting Crushed in a Cutthroat U.S. Market

The pandemic-fueled housing frenzy is smothering a class of homeowners that for years has struggled to gain a foothold in the U.S. market. In the third of a two-part series, “First-Time Homebuyers Are Getting Crushed in a Cutthroat U.S. Market. In the pandemic-fueled housing frenzy, first-time buyers can’t compete. Take Sarah and Koty Chapman, suburban Nashville restaurant workers in their 20s who started this year full of hope, with a baby on the way and plans for a house of their own. They lost a dozen bidding wars for homes under $300,000 up against mortgage borrowers with big down payments, telecommuters with out-of-state salaries and Wall Street investors skipping the line by paying cash. The Chapmans’ daughter was born in April and they’re stuck right where they started, in a rental. Determination has given way to resignation. Record price gains and fevered competition are crushing prospects for U.S. homeownership, a key driver of middle-class wealth. First-time buyers accounted for 29% of existing-home sales in August, the lowest share since January 2019 and below the five-year average of 32%, according to the National Association of Realtors.

The share of government-backed mortgages often used for purchases by young people has also plunged since the start of the pandemic. It’s a stark example of America’s uneven economic recovery. Soaring real estate values have gifted homeowners with record equity, with an average increase of more than $50,000 per mortgage in the past year, according to CoreLogic. But record-low borrowing costs, which should have made housing more affordable for young renters and minority groups historically left out of ownership, instead drove prices higher and pushed them even further behind. Financing is one of the key issues putting first-time buyers at a disadvantage. Sellers have their pick of offers and are choosing cash purchasers or mortgage borrowers with conventional financing who can waive inspections and make up the gap if the lender’s appraisal falls short.

In a ‘short squeeze’ after the record Wall Street bubble burst, millennials are being crushed in a race against the housing market’s seemingly unstoppable market value. The gap has narrowed, but only slightly. Young Americans’ first-time homebuyers are getting crushed in a cutthroat U.S. market. Paying to rent a starter home isn’t an option. Paying cash isn’t a viable alternative. The only viable path into the market for Americans in their 20s, according to U.S. Census Bureau data, is for an investor with out-of-state cash or a telecommuter with out-of-state salary. Millennials are being crushed. It hasn’t been this bad since 2008, when the financial crisis saw Americans lose homes for a third straight year. If you need to sell your house in as little as 7 days, we buy houses in Waterbury Connecticut. Get started by requesting your free cash offer and see how much time and hassle you can save by selling your house in Waterbury Connecticut fast with Sell My House 7.

As recent as early summer, the market might have been soft enough for first-time buyers to hold out hope of finding an affordable home, and housing discrimination against first-time buyers wasn’t widespread. Just a few months ago, data showed young buyers were having a good go at home purchasing. By August, the enthusiasm had faded. Data from the National Association of Realtors show that buyers from millennials have taken 31% of existing-home sales in the past 12 months, while a first-time buyer accounted for 31% of new-home sales from the same group. Now the imbalance is crushing young buyers. That’s one of many reasons why the housing market has to get the hell out of young people’ hands.


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