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0 In the summer of 2020, Alexandra Elmer and her husband, Matthew, began searching for their first home. They thought their wish list was realistic: four bedrooms, two bathrooms, a yard and central air-conditioning.
It would have been a significant step up from renting their rundown Cape Cod-style house with damaged wood floors, tiny closets and a cramped bathroom in a town about 15 minutes from downtown Philadelphia.
With around $70,000 for a down payment, they thought they were in a good position to buy a house in Bucks County, Pa., close to family and Mr. Elmer’s job. But at every turn, they were outbid — including on one house that received 29 other bids, and even after they increased their budget to $650,000 from $350,000.
But as the interest rates spiked and the high home prices held, Ms. Elmer, 28, watched her dream slip away. The math no longer worked — the monthly mortgage payments were simply too highIt feels like it’s never our time,” said Ms. Elmer, 28, who works in private aviation, and had to delay her 2020 wedding because of the pandemic. “I’m stuck at the starting line and other people have been able to progress. I know we will eventually get there one day, but it’s hard to look to the future.”
For most younger Americans, the entree to homeownership, a rite of passage for many adults, has been blocked by forces beyond their control. They have been competing in a market unlike any other, one defined by the largest run-up on home prices in modern history blunted only by the steepest climb in home mortgage rates in decades. As first-time buyers scramble to cobble together money for down payments and closing costs, they are competing in a market with an anemic inventory against investors and repeat home buyers flush with cash.
First-time buyers account for the smallest share of the market in the 41 years that the National Association of Realtors has tracked such data. In the year from July 2021 to June 2022, first-time buyers accounted for just 26 percent of home buyers. Normally, they account for around 40 percent of the market. They were replaced by repeat buyers who were older, wealthier and whiter than they had been in decades, according to a recent survey by the trade association.
The share of white buyers jumped to 88 percent during the survey year, representing the largest share of white buyers since 1997. The share of Black buyers fell to 3 percent from 6 percent, and Asian/Pacific Islander buyers fell to 2 percent from 6 percent from the previous survey year. The median age for all buyers was 53 years old, the oldest they’ve been since 1981, when the association first conducted its survey.
