Qualified first-time and single buyers are having a difficult time obtaining a mortgage, due to "unnecessarily restrictive" lending standards, according to a study by the National Association of Realtors.
Despite a recovering housing market, the NAR notes that lenders still favor dual-income households that are more likely to have higher credit scores. In 2010, single buyers accounted for 32 percent of the market share. That percentage declined to 25 percent in 2012 and 2013.
Lawrence Yun, chief economist of the NAR, said in a statement that a solid housing recovery depends on better access to credit, especially since mortgage rates are expected to rise. "Affordability conditions remain favorable in much of the country, but consumers need access to safe and sound financing, particularly the 30-year fixed-rate mortgage, and with low down payment options for first-time buyers," he says.
First-time buyers: younger, less rich than repeat buyers
The market share of first-time homebuyers fell one percentage point in the past year, from 39 percent to 38 percent. Median age of buyers in the past year was 31 and median income was $67,400. The typical first-time buyer bought a 1,670 square-foot home for $170,000.
The typical repeat buyer was 52 years old, with an income of $96,000. The median home of repeat buyers measured 2,060 square feet, with a median price of $240,000.
According to a Federal Reserve survey, some mortgage lenders are beginning to loosen credit standards in response to fewer applications for refinance and weaker demand for mortgages. More than a quarter of large banks in the survey say they have eased credit standards over the past three months.
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