The California Association of Realtors (CAR) announces State of Housing results.
The CAR has found that weaker than normal job markets have failed to prevent the real estate market from slowing down. Baby Boomers (aged 41 to 67) make up about 40 percent of the market and have growing wealth that fuels sales.
First-time home buyers, those usually responsible for driving housing activity, have dropped to below 30 percent of sales for the first time since 1979. Affordability has come to them with the help for 33 percent more money borrowed in their first mortgages than was recorded last year. Low interest rates on long-term mortgages are expected to stay low, allowing for more housing affordability. The prospect of job and income growth are expected to fuel the market in the coming year, but not to surpass the records hit in 2004.
The 2004 year saw a 22 percent rise in price appreciation, which is creating a chain reaction inland from the most expensive coastal communities.
Some interesting facts about first-time buyers:
Low interest rates have enabled millions of renters to buy their first homes, pushing the homeownership rate to a record high of 69 percent of the U.S. population.
First-time homebuyers are typically 30 to 40-years old, half of which are married, and a third of which are single.
Two or more individual homebuyer rates are rising due to singles pooling resources for co-ownership, allowing better affordability. This group makes up 13.2 percent of sales.
The average first-timer earns $75,000 annually, at a historically high median price of $401,500 for the state of California.
Nearly half of all first-timers chose to purchase out of a desire to stop renting. Thirteen percent claimed investment/tax reasons and eleven percent purchased to move to a better location.
