New Research Shows Housing Is Affordable For First-Time Buyers

Author by Eddie YandlePosted in New homes

New Research Shows Housing Is Affordable For First-Time Buyers

  • By marketing@executiveconstructionhomes.com
  • •
  • 14 May, 2019

Real Estate, Columbia, SC

Home prices have been on the rise for the last seven years, leading many housing market analysts to conclude that first-time homebuyers are being shut out of the market due to affordability concerns.

The National Association of Realtors (NAR) reports on the percentage of First-Time Home Buyers (FTHB) on a monthly and yearly basis. Their latest report shows that FTHB’s made up 33% of buyers in March, which matches their reported share in 2018.

NAR uses survey data from their members to come up with this statistic, so their results do not include every transaction completed. Rather, they only show the transactions reported by members who complete the survey.

The other entity that reports on FTHB share is the American Enterprise Institute (AEI). The AEI uses data from mortgage applications that define an FTHB as “any borrower who did not have a mortgage for the preceding three years.”

This means the AEI measurement also includes former homeowners who transitioned out of a home they previously owned and re-entered the market after at least 3 years. The latest FTHB share data from AEI shows that first-time buyers made up 57.5% of all mortgages in August 2018. NAR’s data shows a 31% share for the same time period.

New research from the New York Federal Reserve shows that these traditional reports on FTHB share have been unable to give an accurate depiction of this group’s involvement in the market.

The NY Fed was able to take consumer credit data and identify when a mortgage payment entered a consumer’s credit report to determine when a first-time home purchase was made. Using this data, they were able to show that AEI’s reported FTHB share was consistently 10% higher. The NAR reports were right on par with their findings until 2010, when NAR’s share dropped to the 11% gap seen today.

So, what does this all mean?

First-time home buyers have not disappeared from the market as many analysts had believed. Buying a home is very much a part of the American Dream for younger generations, just like it had been for their parents and grandparents.

This also means that rising prices have not scared buyers away from the market. Many first-time buyers are making sacrifices to save their down payment and make their dream a reality.

Bottom Line

If you are one of the many renters who is scrolling through listings on your phone every night dreaming of buying your own home, there are opportunities in every market to make that dream a reality!

Published by Eddie Yandle

Eddie and Shanna Yandle are the owners and founders of Executive Construction Homes. Eddie Yandle has been in the building industry his entire life. In 1985, Eddie started working full time with his father, George (Butch) Yandle, in the underground utilities business. Eddie built his first personal home in 1989, soon after that he met his wife, Shanna. They quickly built four homes together and Eddie started the beginning of Executive Construction Homes, LLC. Eddie Yandle became focused on building with superior quality and enduring value. Shanna now serves as office manager while Eddie keeps busy in the field. Staying involved in the building process is very important to Eddie Yandle. From designing the home, to personally inspecting the details, Eddie ensures the home is what the customer expected at their purchase contract. Eddie and Shanna are now raising two beautiful children. Continuing to be a responsible contributor to the community, Executive Construction Homes supports a variety of organizations. Executive Construction Homes is recognized in the Directory of Professionals with Home Building Designations with the National Association of Homebuilders and received many endorsements and recommendations from their clients. In 2012, Eddie Yandle has met all the requirements for membership and has been voted by the Master Builder Committee to be accepted as a Certified Master Builder of South Carolina (CMB). In order to reach this level, Yandle had to participate in 20 hours of continuing education, provide reference letters from customers and business associates, assure a one-year warranty on all his homes and show at least five years’ experience in home building. The education alone sets him apart from all other builders because the state of South Carolina does not require licensed builders to maintain any level of continuing education. Eddie Yandle, of Executive Construction Homes is now one of the select groups of professionals nationwide to earn the Certified Green Professional (CGP) educational designation, identifying him as an Owner/Homebuilder with the skills and the best strategies for incorporating green building principles into new home and remodeling projects. The CGP curriculum includes three days of training from leading building industry practitioners and academics on a range of topics, including strategies for integrating green building principles into homes using cost-effective methods of construction. Continuing to create custom homes, Executive Construction Homes is a builder in Columbia, Elgin, Lexington, Lake Murray, and Irmo. The professional staff works with a variety of floor plans, neighborhoods and is a respected homebuilder in South Carolina. Executive Construction Homes, LLC is a multi award-winning builder being recognized by the Greater Columbia Home Builders Association. Eddie spends his free time not only with his family but other community related functions. Together the Yandles’ involvement in the Columbia, SC area has brought over 850 new homes to families as of December 2019.