Housing's Missing Link: First-Time Buyers

From the Wall Street Journal online:

Economists, real-estate agents and many home builders expected first-time and entry-level buyers to begin returning to the market this year, jump-starting the sputtering housing recovery.

So far, that hasn't happened.

Less buying at the market's lower end by first-time buyers has contributed to limiting sales of existing homes so far this year to a pace of roughly 88% of their 10-year average.

It's also a factor in stunting sales of newly built homes to a pace of roughly 60% of their annual average since 2000.

Some economists now predict that tight lending standards, high prices and the sluggish economic recovery will keep first-timers from returning in full force for several years.

That likely means a slower pace for the housing recovery, already a drag on the broader economy in the past year...

Myriad other factors have dogged first-time buyers in recent years.

According to Census data, Americans from 25 to 34 years of age experienced the biggest decline in income—9%—of any age group from 2007 to 2012 other than people younger than 25. Many also are grappling with student debt that crimps their cash flow.

What's more, there are fewer affordable homes available for first-timers to purchase.

Nationally, the median price of an existing home has increased by 5.2% in the past year to $201,700. The median price of a newly built home registered $275,800 in April, down 1% from a year earlier...
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Link:http://online.wsj.com/news/articles/SB10001424052702304479704579579792502256878?