New US single-family home sales rose unexpectedly in September, and we’re specifically seeing a rebound from two kinds of buyers: first-timers and single women.
The number of first-time buyers increased to its highest level since 2013. The typical first-time homebuyer is in the early 30s and is more likely to buy in an urban environment, which is consistent with young professionals’ general aversion to suburbs, says Lawrence Yun, the chief economist of the National Association of Realtors (NAR).
They’re also looking for smaller size homes and do get some assistance from family members with down payments — 25% of first-time buyers indicated they have received help from their families.
According to NAR’s annual profile of homebuyers and sellers, published on Monday, 17% of first-time homebuyers are single women. That’s more than double the rates for single men.
Yun says this is a trend that has been fairly consistent over the past decade and it’s mirroring the fact that Americans are waiting longer to get married.
“Many young single females are saying, ‘Look, there’s a delay in terms of the age of marriage’ and many people are earning a higher salary than before. So if they see a good opportunity, they are jumping at the chance,” he said. Plus, he said, women are better than men at paying their mortgages so single females are “taking advantage of the homeownership route.”
Despite the uptick in first-time homebuyers, there’s a major factor preventing individuals, especially young professionals, from purchasing a home — student debt.
Americans owe $1.4 trillion (and counting) in student loan debt and Yun says it’s weighing heavily on the housing market from both sides.
“[The lenders] are saying this extra debt will prevent the loan approval. People with student debt are indicating that they don’t want to carry two large debts at the same time. Bottom line is that student debt, on average, delays the ownership entry point by five years,” he said.
Overall, however, Yun says he’s encouraged by the return of first-time homebuyers and believes there will be a steady upward trend going into 2017.
He says because of the pent-up demand, there’s still an additional 10% improvement potential and we can expect even more home sales next year.
Melody Hahm is a writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Follow her on Twitter @melodyhahm.