Young Americans are being driven out of the US housing market

According to a national profile of home buyers and sellers by the National Association of Realtors (NRA), American buyers are whiter, older and wealthier.

The New York Times reports the NAR added that first-time buyers account for the smallest share of the market for the first time in four decades. According to the NAR, white home buyers account for 88% of home sales during the survey, a 6% increase from the same period in 2021 and the highest level since the late 1990s.

The findings validate the challenges faced by young Americans, especially those with low to moderate incomes, when trying to buy a home for the first time. The US real estate market is widening racial and generational disparities and the consequences could be disastrous in the future.

Home ownership is still one of the most proven ways to build wealth in the United States. Even if a home’s value remains stable, it provides stability and can be used as collateral to take out loans, pay for a child’s college, and more.

For black Americans, being excluded from buying a home usually meant redlining and racism in the banking and real domain Industries.

Things were made worse by the Federal Reserve raising interest rates above 7%, eliminating what little power first-time homebuyers had. Additionally, there is a massive shortage of homes in the United States today, which has led to bidding wars and a significant increase in home prices.

“This is a feedback mechanism that can potentially amplify wealth inequality in our economy,” said Austin Clemens, the director of economic measurement policy at the Washington Center for Equitable Growth, told The Times. “It hits young people, it hits low-income people. And we also find that it hits Hispanic and Black households particularly hard.

Historically, first-time home buyers made up about 40% of the U.S. housing market, however, that percentage fell to 26% during the 12-month survey from July 2021 to June 2022, the lowest level since that the NAR began tracking this data in 1981. Additionally, the median age of a first-time buyer has risen to 36, its oldest since 1981.

Black and Asian Americans make up less than 6% of the U.S. real estate market, with their market share falling over the past year. Hispanic owners accounted for 8% of the market.

“It’s amazing what anyone can lose when it comes to real estate wealth,” Jessica Lautzvice president of demographics and behavioral insights at the National Association of Realtors, adding that a typical homeowner has earned about $210,000 in equity over the past decade.

Previous FPI bonds: holding of FPI bonds falls to a record level
Next Live Updates: Chinese stocks rise sharply on continued reports of Covid policy easing