there aren’t as many first-time homebuyers on the market.
Why is that? Credit could be a major factor.
Home ownership is down slightly from a year ago and in the third quarter of 2013, it didn’t budge at all. In January 2005, home ownership was at 69 percent, but in January 2013, it dropped to 65 percent.
Household formation has seen the biggest change with the rise and fall of homebuyers moving into rentals and young Americans staying at home longer. Homeownership was at 380,000 more than a year ago. Compare that with 2006 when 1.3 million new households were formed and 1.8 million formed in 2002. That brings the average to 1.1 million new households so it’s quite a dramatic drop down to 380,000.
So What’s Keeping People at Home Longer?
A tighter credit score and history is required for homeownership and loans now compared with the past. Single buyers fell from 32 percent down to 25 percent this year and first time buyers fell to 30 percent . On the other end of that spectrum, home prices rose by 12 percent year over year, which isn’t making things any better.