First-Time Homebuyers Hit 32% Of Sales In October As Housing Affordability Shows Signs Of Modest Improvement
Mortgage Rates Near 6% May Not Be Low Enough
Borrowing costs have declined close to 6%, but Yun cautioned that additional drops may be necessary to restore normal market activity. “To get 1 million more sales requires drastically more supply — we’re not seeing that,” he said during the NAR: NXT conference on Nov. 14 in Houston, Texas, according to Homes.com. “We also need a much more meaningful decline in rates. If they could get to 5.9% or 5.8%, that could psychologically [affect] buyers.”
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NAR calculated in July that rates falling to 6% would bring an additional 500,000 buyers into the market. Reaching 5 million annual sales would require another 500,000 purchasers beyond that threshold.
The last time the market operated at normal levels was 2019, before the pandemic, when annual sales reached 5.2 million, Yun said.
Inventory Remains Below Market Needs
Available homes for purchase totaled 1.52 million in October, down slightly from September. Current supply increased 11% from one year ago, representing 4.4 months of inventory, compared to 4.5 months the previous month, NAR said.
Yun predicted at the NAR conference that 2026 would bring stronger conditions, with sales expected to rise 14%, according to Homes.com.
Whether the trend in first-time buyer activity represents a sustained shift or a temporary fluctuation remains unclear. The number is encouraging, though determining if it signals a lasting pattern will require additional months of data, Yun said.
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This article First-Time Homebuyers Hit 32% Of Sales In October As Housing Affordability Shows Signs Of Modest Improvement originally appeared on Benzinga.com
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