00:00 Speaker A
The number of first-time homebuyers surged during the pandemic with 2.4 million first-time mortgages issued in 2020. And while buyers faced low home supply and rising prices, they were able to lock in lower rates before the Fed hiked interest rates to combat inflation. But now, as some of those buyers prepare to sell their homes, they are struggling to break even. Yahoo Finance senior housing reporter Claire Boston is here to break it down for us. Claire, what do we know around this?
00:37 Claire Boston
Hi, Brad. Um, so we are looking at an environment where a lot of people who maybe bought their homes five years ago in those crazy pandemic times are now looking to sell. You know, the home no longer fits their needs, maybe they’ve had a life change, uh, but they are selling into a market that looks a lot different in most parts of the country. And as a result, um, it may be hard for some of the sellers to break even on their purchases. Traditionally, it takes at least five years, but sometimes more like 10 years to break even on that home purchase. And right now in this market, prices are not appreciating as fast and they are, you know, even falling in some markets, and all of that is a really tough environment for those, especially first-time sellers, to be.
01:52 Speaker A
And we do know a new report as well from Apollo shows the share of first-time homebuyers had actually shrunk from 50% in 2010 to 24% in 2024. What what is behind this drop and what does it mean for the housing market?
02:12 Claire Boston
Yeah, I mean, it is an absolutely crazy number. And what we are really seeing there is just a story about how hard it is to afford a home now. Mortgage rates are high, all-in prices and what you need to bring to the table in terms of a down payment are quite a bit higher, and that is causing issues for those home buyers to enter the market for the first time, especially when you think about the fact that those first-time homebuyers may be competing with return buyers who are buying in cash. So it’s really tough out there.
02:54 Speaker A
Claire, thanks so much for taking the time.
02:57 Claire Boston
Thank you.