Economists, real-estate agents and many home builders expected first-time and entry-level buyers to begin returning to the market this year, jump-starting the sputtering housing recovery. So far, that hasn’t happened.
Less buying at the market’s lower end by first-time buyers has contributed to limiting sales of existing homes so far this year to a pace of roughly 88% of their 10-year average. It’s also a factor in stunting sales of newly built homes to a pace of roughly 60% of their annual average since 2000.
Some economists now predict that tight lending standards, high prices and the sluggish economic recovery will keep first-timers from returning in full force for several years. That likely means a slower pace for the housing recovery, already a drag on the broader economy in the past year.
On Friday, the U.S. Census Bureau reported that sales of new homes in April amounted to a seasonally adjusted annual pace of 433,000, down 4.2% from a year earlier though up month over month. In the market for previously owned homes, sales in April registered a 6.8% decline from a year earlier though they also were up month over month, the National Association of Realtors reported Thursday.
Information from The Wall Street Journal
