First-time buyers are coming up strong, representing about 45% of all home buyers --up from 37% this time last year. This is considering that home values remain 14% higher than last year, and the average monthly mortgage payment is as much as 60% more in many markets.
It's no secret that affordability challenges have affected the market. However, it now seems to be fueling the demand for lower-priced starter homes and causing a rebalance in the market --a rebalance that can benefit first-time buyers!
In June, new listings typically went under contract after only eight days, but data as recent as August shows that listings are now averaging 16 days on the market.
To entice more shoppers, sellers are dropping their prices. According to Zillow's latest monthly market report, the share of listings with a price cut grew to roughly 28% in August.
This means that first-time buyers, who have the flexibility to shop without trying to time the purchase of their new home with the sale of an existing home, have more bargaining power.