According to an article published by CNBC on August 17, 2015, first-time home buyers are waiting longer than ever before to purchase their first home. Based off of new analysis from the real estate firm, Zillow, the average first-time home buyer is renting for 6 years, which is more than doubled from previously 2.6 years in the 1970s. A generation ago, the average age of a first-time home buyer was 30 and is now up to 33 years of age.
Experts say that the wait is due to financial challenges and that for renters, saving money for a down payment is a barrier. Most first-time home buyers are relying on person savings for part of their down payments, but with the increase of rental prices it’s making it more difficult to put money aside for savings. Nationwide, rental prices have increased about twice the pace of average hourly wage growth. An astounding 46 percent of rents, ages 24 to 34, are spending upwards of 30 percent of their incomes on rent, according to a report by Harvard University’s Joint Center of Housing Studies.
Housing specialists note that surveys still show a strong interest to buy among the young Americans, but that their timelines for purchasing depend on achieving more stability in their careers. It appears that job security is a vast factor according to a study by The Money Source. After examining over five thousand home buyer applications, the buyers averaged about 4.5 years in their field of work and help their current job for at least three years. The outcomes of the study prove how acute job stability has become for a generation that entered the workforce during the Great Recession and its slow-growth recovery.