Tighter lending requirements leading to fewer first-time buyers

Home loans have been tougher to obtain, which has eliminated many first-time homebuyers.According to a recent RISMedia report, the nation's tighter lending requirements are preventing first-time homebuyers from entering the market.The trend is drastically different than last year, when first-time buyers overwhelmed the market, thanks to the federal government's tax credit. However, according to a recent report from the National Association of Realtors, first-time buyers represented only 35 percent of the nation's home sales during the second quarter, down from 46 percent last year.Furthermore, the most recent HousingPulse Survey conducted by Campbell Surveys and Inside Mortgage Finance revealed the proportion of first-time homebuyers fell to 35.4 percent in June, which is down from 37.3 percent in May.With fewer first-time buyers in the market, many regions' housing sectors have recorded higher inventory of distressed properties. The HousingPulse Distressed Property Index declined to 44.7 percent in June from 46.7 percent in May.Ironically, the average interest rates for the nation's mortgages are now the lowest they've been all year, which would normally entice first-time buyers to take advantage of the affordability.Thus, while interest may remain among first-time homebuyers, especially in areas with strong job markets, such as the Houston real estate sector, tight lending standards are preventing increased sales nationwide.Courtesy of 2M Realty News

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