Lack of first-time homebuyers ties up housing
Investors may fill the gaps as young Americans retreat
It seems that industry professionals are becoming more and more fearful of what the lack of first-time homebuyers might bring to the housing market. With fewer young adults working and more buried under student debt, first-time homebuyers seem to be shying away from the market and opting to rent or even remain at home with their parents.
In a series of interviews at the Five Star Conference in Dallas, Texas, on Monday, a number of housing experts expressed their strong concern about the liquidity of the industry if in fact potential first-time hombuyers veer off the path of homeownership and decide to rent instead.
Brent Taggart, the senior vice president of client relations at Green River Capital, noted that fewer and fewer young adults that fall within that age group see homeowership as the American Dream. These days, young adults only stay at their job for two or three years, so the desire to be mobile and not tied down to a mortgage is more appealing.
LRES CEO Roger Beane added that investors are swooping in and buying the majority of homes that would belong to first-time homebuyers, which takes away the natural liquidity of the recovering market.
However, according to Dale McPherson, president and CEO of Field Asset Services, investor activity is enough to keep the housing market flowing and to replace the lack of first-time homebuyers. Investors aren’t going anywhere, noted McPherson, who works closely with investors. While investors are beginning to transition into markets that have yet to see strong price appreciation, there is little dissipation of investor activity nationwide.
Because there are so many different cooks in the kitchen when it comes to a recovering housing market, each contributing factor becomes so highly scrutinized if it doesn’t reach expectations. However, it’s important to note there are so many factors at play in a recovering market that there will always be fluctuations that alarm industry experts.