"One of the clearest signs of change is the return of first-time buyers. For much of the past few years, they were effectively sidelined, priced out by rising rates, limited inventory, and competition from all-cash buyers and investors. Now, they are beginning to re-enter the market, making up 34% of purchases in February, surpassing last year's annual share."
"As they return, the dynamics of buying are also shifting. Homes are staying on the market longer, and bidding wars have eased, with just 14% of homes selling above asking price. The idea of negotiating a contract, unheard of for years, has started to reappear."
"First-time buyers also tend to set the broader market in motion. Their purchases free up rental supply and enable move-up buyers, creating a ripple effect and generating roughly $125,300 in local economic activity per home sale."
"The biggest constraint remains housing supply, especially at the lower end of the market. Affordable, entry-level homes are still limited, making it difficult for many buyers to break in."
The U.S. housing market has been stagnant for three years due to high mortgage rates and low inventory. As the spring homebuying season begins, there are signs of potential movement. Mortgage rates have decreased slightly, and affordability has improved for eight months. First-time buyers are re-entering the market, making up 34% of purchases in February. Homes are staying on the market longer, and bidding wars have diminished. However, housing supply, particularly affordable homes, remains a significant constraint.
Read at Fortune
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