How tough is the current real estate market?
With rising interest rates now averaging more than 7% and limited inventory, the market is especially tough for first-time home buyers on a limited budget.
The age when someone buys their first home in America is skewing older. In 2022, the average age of the first-time homebuyer was 36, which is an all-time high, according to the National Association of Realtors. Just a year earlier, the average age was 33.
In 2022, only 26% of homebuyers were first-time compared to 50% of all homebuyers in 2010.
Housing affordability and inventory challenges significantly impacted when, where and how consumers purchased homes, according to the National Association of Realtors.
First-time buyers are older as a result of saving for down payments for longer periods of time or relying on a generational transfer of wealth, the report said.
For younger many first-time buyers, sacrifices have to be made to buy a house.
Lindsay and Michael Hyland started their house hunt last year in St. Petersburg, Florida, and moved to northern New Jersey.
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They lived with Michael's parents in New Jersey to save for a down payment. They were outbid in Florida as people were paying with cash offers.
"People were bidding $60,000 to $70,000 over asking," said Lindsay Hyland. "We can't afford that."
With the rising interest rates, the Hylands opted to buy a townhouse to stay within their budget of around $500,000, instead of a single-family home. A two-bedroom is tight for a growing family with a baby on the way. But they would rather live within their budget than buy something they cannot afford.
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