First-time home buyers buy houses while current owners can’t sell
For the first time since 1981, first-time home buyers make up a majority of those who have recently bought a home.
A big reason for this is the homebuyer tax credit, of course, but the other big reason, which NAR doesn’t mention, is that many repeat buyers are kept out the market because they are saddled with properties that are underwater.
Most of us know people who would like to sell their properties, but they can’t sell their properties for anywhere near what is owed. Thus, fewer current homeowners are in any position to buy a house, paving the way for first-time buyers to be in the majority.
The fact that so many homeowners are chained to giant white elephants known as owner-occupied homes has larger social and economic costs as well.
As noted in the recent cover story in Time on “Rethinking Homeownership” there is an interesting positive correlation between unemployment and homeownership rates. Areas with high homeownership rates also have high numbers of unemployed homeowners who are unable to move to where the jobs are available, thus driving up the local unemployment rate.