By Mike Colpitts
Despite first time home purchases increasing due to record low mortgage rates and lower home prices, the actual rate of first time homeownership is slipping for the largest homebuyer age group, according to a survey released by a real estate research firm.
The latest trends report from CoreLogic shows homeownership rates for the 25 to 34 and 35 to 44 year-old age groups composing the largest number of first time home buyers, was down 10% in 2010 compared to 30 years earlier. The slip in homeownership among first time buyers is apparently because of doubts over the weak economy and declining home prices in most areas of the U.S.
The research firm compiles data on housing sales, home values, negative equity and foreclosure activity and trends in the residential real estate market.
The study also revealed that the real median income for first home buyers hadn’t changed since the 1970s until declining 2.3% in 2010 at the peak of the recession. U.S. median incomes peaked in 1999 after more than forty years with little or no change. Consumers are also allocating a higher percentage or share of household income to housing, the study showed.
That means families and even higher earning individuals have less to spend on other items besides necessities with high joblessness averaging 9.1% in the U.S. The expense housing takes to keep a roof over peoples heads has been rising as rental rates increase in most areas of the nation.
Foreclosure properties, including single family homes and condominiums sold through lenders at public auction have also seen a large reduction as consumers purchase more properties directly from banks as REOs after formally repossessing them.
The shift demonstrates that home buyers quickly caught up with trends to obtain the best price possible on foreclosed real estate. Home values in most of the U.S. have been sliding for more than four years as banks sustain higher losses due to their risky lending practices during the real estate bubble.