The housing market – stunted by a combination of high mortgage rates, low supply and high prices – remains difficult for potential home buyers. And analysts, according to ABC News, don't expect that to change anytime soon.
Current homeowners have avoided selling in order to hang onto their low mortgage rates, while new buyers have been simultaneously pushed away by the high cost of borrowing. Though high mortgage rates tend historically to lead to lower prices, the current limitation in supply has kept prices high, presenting buyers with a seemingly insurmountable affordability challenge.
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Despite this environment, nearly half of all home sales are being made by first-time home buyers, according to new information from Zillow.
"Home buying activity, in general, is pulled back because of the affordability challenge," Zillow economist Skylar Olsen told CNBC. "What we're talking about here is a first-time home buyer taking up a larger share of that smaller pie."
Current homeowners – the "repeat buyers" – are pulling back, she said, while first-time owners are incentivized to push ahead regardless of high mortgage rates.
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These first-timers, Olsen said, are overcoming that affordability challenge through the local bank of "Mom and Dad."
"First-time buyers cobbled together down payment sources from two places. Some of that is hard-won savings, the other part is a gift from family or friends to make it work," she said, adding that nearly half of first-timers sought help from the "bank of Mom and Dad."
The 30-year fixed mortgage rate ticked up to more than 7% in August, up close to 2% for the year.
"If you think about who has access to the bank of Mom and Dad, that's a pretty privileged network," Olsen said. "For other households, they might have to seek out a down payment assistance program."
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