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Survey: Singles, First-Time Buyers Still Struggling with Financing

Findings released in the ""National Association of Realtors'"":http://www.realtor.org/ (NAR) annual ""Profile of Home Buyers and Sellers"":http://www.realtor.org/news-releases/2013/11/home-buyers-and-sellers-survey-shows-lingering-impact-of-tight-credit survey demonstrate what industry experts have been saying since the housing market started to pick up: Access to credit is going to have to loosen before mortgage-dependent homebuyers can make a more meaningful contribution to the recovery.

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According to NAR chief economist Lawrence Yun, conditions are especially restrictive for single and first-time buyers, who are less likely to have the resources to make a costly down payment and whose credit profiles are underdeveloped. Among survey respondents, 66 percent were married couples, a combined 25 percent were single men and women, 7 percent were unmarried couples, and 2 percent classified themselves as ""other.""

""Single homebuyers have been suppressed for the past three years by restrictive mortgage lending standards, which favor dual-income households who are more likely to have higher credit scores,"" Yun said.

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He also added that the survey does not include information about investor activity, which has acted as a crutch for the budding recovery as owner-occupants struggle to get back into the market.

First-time homebuyers represented 38 percent of the market over the past year, down from 39 percent in the 2012 study and two points lower than the long-term average dating back to 1981. While that's only a moderate decline, Yun stressed that these first-time buyers ""are instrumental in housing recoveries because they help existing home owners sell and make a trade.""

The median age of first-time buyers was 31, unchanged from 2012, and the median income was $67,400; their typical home purchase cost $170,000. Among repeat buyers, the median age was 52, the median income was $96,000, and the home cost was $240,000.

Nearly 90 percent of buyers financed their purchase in the last year, with the median down payment ranging between 5 percent for first-time buyers to 14 percent for repeat buyers. To obtain the resources for their down payment, 78 percent of first-time homebuyers tapped into savings, 27 percent received a gift from a friend or relative, and 7 percent received a loan from family or friends. Nearly 40 percent financed with a low down payment mortgage through the Federal Housing Administration (FHA).

While some buyers struggled to make their purchase, those who did seemed satisfied overall, with 91 percent expressing satisfaction with the buying process and 80 percent saying their home is a good investment.

""Interestingly, 6 percent of all buyers had previously sold a foreclosure or short sale, showing that sellers of distressed property are beginning to recover financially,"" Yun said.

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