First-time homebuyers are an endangered species in the U.S.
Figures from the National Association of Realtors (NAR) show that only 24% of housing sales last year were by first-time homebuyers — that's down from 50% in 2010. The typical purchaser is also older than in the past, with an average age of 38, or about 10 years above historical norms.
Such trends reflect the challenges of climbing on the property ladder as home prices hover near record highs, inventory remains low and with mortgage rates at their highest level in years.
"There are fewer first-time homebuyers and they are older than we've ever seen, both because of headwinds inside and outside of the housing market," NAR deputy chief economist Jessica Lautz told CBS MoneyWatch.
Opportunity missed
Americans who are shut out from buying their first homes miss out on an opportunity to build wealth through homeownership, Lautz said.
"It's their biggest asset, and with the delay into homeownership first-time homebuyers are losing about 10 years of housing wealth. And that's for those who can enter into the market," she said. "For those who can't, they lose out on housing wealth by not having that as the biggest asset in their nest egg."
Only about 1 in 5 listed homes in March were affordable for households with $75,000 in annual income, according to a NAR analysis of property listings. Today, a household with annual income of $50,000 can only afford 8.7% of listings, down from 9.4% a year ago, according to the data.
"The lack of homes, especially at affordable price points where they would be entering the market, has been plaguing first-time homebuyers for the last several years," Lautz said. "It's been a continual issue, especially with interest rates. It makes the cost of homeownership quite high."
Along with inadequate construction of affordable housing, many existing homeowners are reluctant to sell their properties given their lower mortgage rates.
"People who are homeowners have no motivational factors to move, so that's not freeing up inventory," Lautz said. "It's almost created a hoarding situation for those in low-interest rate mortgages who don't want to separate from them."
Financial squeeze
Other factors are making it hard for people to buy a first home. The high cost of rent gets in the way of saving for a down payment, while credit card debt, car loans and child care costs also hold first-time homebuyers back. More recently, meanwhile, the resumption of student loan payments is putting many people under financial pressure.
Some Americans are managing to save enough for a first home by temporarily moving in with family or friends to minimize the cost of rent, Lautz said. But that approach isn't viable for everyone.
"It has been a pathway to ownership for some. But for someone who is 38-years-old, moving in with mom and dad can get uncomfortable," she said. "For an older homebuyer, that might be less attractive for everyone involved."
Australian reporter covering Los Angeles protests shot with rubber bullet by police officer
Kristi Noem says "we are not going to let a repeat of 2020 happen" amid L.A. crackdown
Magic in the dark: The fantastical worlds of Lightwire Theater
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New York Post
29 minutes ago
- New York Post
Restaurants from IHOP to Chipotle sound alarm over tariffs spooking customers into staying home
Fast-food chains from IHOP to Chipotle are feeling the pain as fears about stubbornly high prices and a shaky job market have pushed more Americans to eat at home. Americans ate 1 billion fewer meals at restaurants between January and March than they did the year before, according to data from market research firm Circana. That decline has set off alarm bells for executives at IHOP and Applebee's owner Dine Brands, Sweetgreen, Wendy's, Denny's and Chipotle Mexican Grill – all of whom have warned that their sales are being hammered by an increasingly cautious US consumer. Advertisement 3 IHOP and Applebee's owner Dine Brands warned that sales are being hammered by increasingly cautious consumers. Christopher Sadowski Denny's CEO Kelli Valade last week nodded to 'a very choppy consumer environment' while chief financial officer Robert Verostek blamed 'macroeconomic changes' for the company's volatile July sales. McDonald's has seen its US sales bounce back as the Happy Meal maker leaned into value to attract budget-conscious customers. But CEO Chris Kempczinski said visits from low-income customers plunged by 'double-digits' between April and June as their incomes declined. Advertisement 'The result of that is you're seeing people either skip occasions, so they're skipping…breakfast or they're trading down either within our menu or they're trading down to eating at home,' Kempczinksi said. 'This bifurcated consumer base is why we remain cautious about the overall near-term health of the US consumer,' he added. McDonald's has ramped up its value offerings and kept its wildly popular $5 Meal Deal on the menu to 're-engage' with low-income diners – who typically visit the Big Mac chain more frequently than middle- and high-income counterparts, Kempczinski said. Advertisement Rivals have been quick to release their own value meals this year – from Taco Bell's Luxe Boxes to $5 meal combos from Burger King and Wendy's. 3 McDonald's has seen its US sales bounce back as it leaned into value to attract budget-conscious customers. REUTERS But visits to US restaurants have fallen 1% so far this year compared to 2024, according to market research firm Black Box Intelligence. Fast-food joints have suffered the worst losses, with traffic down 2.3% in the second quarter compared to last year. Advertisement Even those who have continued to dine out are buying fewer beverages and appetizers or 'trading down' to cheaper menu items, Dine Brands CEO John Peyton said. Wingstop CEO Michael Skipworth said the chicken-wing chain had seen 'softness' among low-income diners, adding that the company's research uncovered 'concerns about elevated prices, future job prospects, and general anxiety about the future.' Food inflation has slowed, with prices remaining flat in July from the month before, the Bureau of Labor Statistics said Tuesday. 3 Like many other fast-food chains, Taco Bell released meal deals this year in an attempt to win over customers. Christopher Sadowski Yet the cost of eating out has continued to outpace the cost of eating at home – rising 0.3% in July while the food at home index fell 0.1%, according to Tuesday's report. The costs of dining out are expected to continue outpacing those of eating at home, according to the Department of Agriculture. 'It's going to take a lot of levers being pulled in order to get consumers more comfortable to spend money out of home. And it's not going to be this year,' Sally Lyons Wyatt, a Circana adviser who specializes in the food service industry, told the Financial Times. Executives have said they remain hopeful that once the anxiety around tariffs eases, customers will return to restaurants and drive-thru lanes. Advertisement 'I think much of what we're experiencing right now is due to macro and the consumer, the low-income consumer is looking for value,' Chipotle CEO Scott Boatwright said last month. 'I think as sentiment improves, the business will improve,' he added.
Los Angeles Times
29 minutes ago
- Los Angeles Times
Tariff ‘Mission Accomplished' hype is just that
On May 1, 2003, George W. Bush announced, 'Major combat operations in Iraq have ended.' He was standing below a giant banner that read, 'Mission Accomplished.' At the risk of inviting charges of understatement, subsequent events didn't cooperate. But it took a while for that to be widely accepted. We're in a similar place when it comes to President Trump's experiment with a new global trading order. 'Tariffs are making our country Strong and Rich!!!' proclaims Trump, making him not only the first Republican president in living memory to brag about raising taxes on Americans, but also the first to insist that raising taxes on Americans makes us richer. MAGA's mission-accomplished groupthink relies primarily on three arguments. The first is that Trump has successfully concluded a slew of beneficial trade deals. The truth is that some of those deals are simply 'frameworks' that will take a long time to be ironed out. But Trump got the headlines he wanted. The second argument is a kind of populism-infused sleight of hand. The 'experts' — their scare quotes, not mine — are wrong once again. The White House social media account crows, 'In April, 'experts' called tariffs 'the biggest policy mistake in 95 years.' By July, they generated OVER $100 BILLION in revenue. Facts expose the haters: tariffs WORK. Trust in Trump.' But the high-fivers are leaving things out. The most-dire predictions of economic catastrophe were based on the scheme Trump announced on April 2, a.k.a. 'Liberation Day.' Trump quickly backed off that plan ('chickened out' in Wall Street parlance) in response to a bond and stock market implosion. Saying the experts were wrong under those circumstances is like saying experts opposed to defenestration were wrong when they successfully convinced a man not to jump out a window. The third argument, made by the White House and many others — that tariffs are working because they're raising money — is a response to a claim no one made. To my knowledge, no expert claimed tariffs wouldn't raise money. The estimates of these revenues from Trump world are stratospheric. Commerce Secretary Howard Lutnick expects somewhere between $700 billion and $1 trillion per year. Last month, the government collected $29 billion. It's likely this number will significantly increase as more tariffs come online and businesses run down the inventory they stockpiled earlier this year in anticipation of more tariffs to come. Normally, Republicans don't exult over massive revenues from tax hikes. But Trump's defenders get around this problem by insisting that money is 'pouring' and 'flowing' into America from someplace else. It's true that tariff revenue is pouring into the Treasury, but that money is coming out of American bank accounts, because American importers pay the tariff. Even Treasury Secretary Scott Bessent cannot deny this when pressed. So yes, tariffs are 'working' the way they're supposed to; the problem is Trump thinks tariffs work differently than they do. It's possible some foreign exporters might lower prices to maintain market share, and some American businesses might absorb the costs — for now — to avoid sticker shock for inflation-beleaguered consumers, but what revenue is generated still comes from Americans. Ultimately it means higher prices paid here, reduced profits for businesses here or reduced U.S. trade overall. Sometimes, when pressed, defenders of the administration will concede the true source of the revenues, but then they say the pain is necessary to force manufacturers and other businesses to build and produce in the United States. It's backdoor industrial policy masquerading as trade policy. That, too, might 'work.' But all of this will take time, no matter what. And, if it works, that will have costs, too. Manufacturing in America is more expensive — that's why we manufacture so much stuff abroad in the first place. If this 'reshoring' happens, our goods will be more expensive, and less money will 'pour in' from tariffs. It's difficult to exaggerate how well-understood all of this was on the American right until very recently. But the need to grab any argument available to declare Trump's experiment a success has a lot of people not only abandoning their previous dogma but leaping to the conclusion that the dogma was wrong all along. Maybe it was, though I don't think so. The evidence so far suggests that problems are looming. The dollar is weakening. Prices continue to rise. The job market is reeling. The stock market (an unreliable metric, according to MAGA, when it plummeted after Liberation Day) is holding on, thanks to tech stocks. The truth is we won't have real evidence for a while. It's worth remembering that Americans don't live by headlines and press releases and they don't live in the macro economy either. Declaring 'Mission Accomplished' for the macro economy won't convince people they're better off in their own micro-economies when they're not. @JonahDispatch
Yahoo
an hour ago
- Yahoo
US inflation shows limited tariff impact, but prices still rise
US consumer prices rose 0.2% in July and 2.7% over the past year, coming in slightly below the expected tariff-induced spike. Core inflation hit 3.1% — its highest level since February — as shelter and service costs edged higher but tariff impacts remained modest. The figures suggest that slowing rent increases and cheaper gas are offsetting some impacts of US President Donald Trump's sweeping tariffs. Still, stubbornly high inflation puts the Federal Reserve in a difficult spot. Hiring slowed sharply in the spring, after Trump announced tariffs in April. Fed Chair Jerome Powell has warned that worsening inflation could pause rate cuts — a stance that has enraged Trump, who has defied traditional norms of central bank independence and demanded that the Federal Reserve lower borrowing costs. Gas prices fell 2.2% from June to July and have plunged 9.5% from a year earlier, the government's report said. Grocery prices slipped 0.1% last month, though they are still 2.2% higher than a year ago. Restaurant meals continued to get more expensive, however, rising 0.3% in July and 3.9% from a year earlier. Tariffs appeared to raise the cost of some imported items. Shoe prices jumped 1.4% from June to July, though they are still just 0.9% more expensive than a year ago. The cost of furniture leapt 0.9% in July and is 3.2% higher than a year earlier. Clothing prices ticked up 0.1% in July, after a larger rise in June, though they are still slightly cheaper than a year ago. Trouble for the government's chief inflation tracker Tuesday's data arrives at a highly-charged moment for the Labour Department's Bureau of Labour Statistics, which collects and publishes the inflation data. Trump fired Erika McEntarfer, then the head of BLS, after the 1 August jobs report also showed sharply lower hiring for May and June than had previously been reported. The president posted on social media Monday that he has picked E.J. Antoni, an economist at the conservative Heritage Foundation and a frequent critic of the jobs report, to replace McEntarfer. Related Trump picks top economic aide Stephen Miran for Federal Reserve board Gold futures rise after report Trump has placed tariffs on gold bars 'E.J. will ensure that the numbers released are honest and accurate,' Trump said on Truth Social. Adding to the BLS's turmoil is a government-wide hiring freeze that has forced it to cut back on the amount of data it collects for each inflation report, the agency has said. UBS economist Alan Detmeister estimates that BLS is now collecting about 18% fewer price quotes for the inflation report than it did a few months ago. He thinks the report will produce more volatile results, though averaged out over time, still reliable. Prices likely to rise later in the year as tariffs set in Americans are likely to absorb more trade-war costs in the coming months as Trump begins to finalise tariffs. Once businesses know what they will be paying, they are more likely to pass those costs to customers, economists say. Trump has insisted that overseas manufacturers will pay the tariffs by reducing their prices to offset the duties. Yet the pre-tariff prices of imports haven't fallen much since the levies were put in place. Economists at Goldman Sachs estimate that foreign manufacturers have absorbed just 14% of the duties through June, while 22% has been paid by consumers and 64% by US companies. Based on previous patterns, however — such as Trump's 2018 duties on washing machines — the economists expect that by this fall consumers will bear 67% of the burden, while foreign exporters pay 25% and US companies handle just 8%. Many large US companies are raising prices in response to the tariffs, including apparel makers Ralph Lauren and Under Armour, and eyewear company Warby Parker. Consumer products giant Procter & Gamble, maker of Crest toothpaste, Tide detergent and Charmin toilet paper, said late last month that it would lift prices on about a quarter of its products by mid-single-digit percentages. And cosmetics maker e.l.f. Beauty, which makes a majority of its products in China, said on Wednesday that it had raised prices by a dollar on its entire product assortment as of 1 August because of tariff costs, the third price hike in its 21-year history. 'We tend to lead and then we will see how many more kind of follow us,' CEO Tarang Amin said on an earnings call Wednesday. Matt Pavich, senior director of strategy and innovation at Revionics, a company that provides AI tools to large retailers to help them evaluate pricing decisions, says many companies are raising prices selectively to offset tariffs, rather than across the board. 'Up until now we haven't seen a massive hit to consumers in retail prices,' Pavich said. 'Now, they are going up, we've seen that.'
