It’s the most profitable time to sell a house since the Great Recession started in late 2007, but first-time buyers are increasingly scarce. More Americans are qualifying for mortgages, yet minorities still get disproportionately rejected.
As The Associated Press reports, three new industry analyses released today show that the recovering economy has produced a divided U.S. housing market. Where people live, their age and the color of their skin have largely influenced who has benefited as real estate continues to heal from the bursting of a mortgage bubble that triggered the worst economic downturn in nearly 80 years.
Budding sales growth over the past year has overwhelmingly helped existing owners who are seeking an upgrade. But the millennials buying their first home are being priced out of the market because student debt has prevented them from saving. And a major gap exists among who qualifies for a mortgage even as the overall approval rate improves.
The share of first-time homebuyers has fallen for the third consecutive year to its lowest level since 1987, according to a survey by the National Association of Realtors. First-timers accounted for less than a third of sales that are expected to comfortably exceed 5 million this year. This group has traditionally represented 40% of sales.
While it has gotten easier to receive a mortgage, black and Hispanic homebuyers continue to lag substantially behind whites and Asians. The mortgage rejection rate fell last year to 11.2% from 12.4% in 2013, according to Zillow, the real estate marketplace. The rejection rate for blacks also fell over the past year, but it remains elevated at 23.5%. Hispanics face similar obstacles. They composed only 5.5% of mortgage approvals, despite being 17.3% of the population.
