WASHINGTON, Oct. 30 (Xinhua) -- The severe drought in housing supply across the United States and higher home prices have kept many first-time homebuyers out of the market, according to a new survey released on Monday.
The share of sales to first-time home buyers fell to 34 percent in 2017, down from 35 percent in 2016 and the fourth lowest share since 1981, according to the National Association of Realtors' (NAR) annual Profile of Home Buyers and Sellers.
"The dreams of many aspiring first-time buyers were unfortunately dimmed over the past year by persistent inventory shortages, which undercut their ability to become homeowners," said Lawrence Yun, NAR chief economist.
The supply scarcity has led to higher home prices. Forty-two percent of buyers paid the list price or higher for their home, which is up from 40 percent a year ago, according to the survey. "Many of those in the market to buy a home this year had little room to negotiate," said Yun.
The drop in first-time buyers is also partly due to a rise in student debt, the survey said. Forty-one percent of first-time buyers indicated they have student debt, which increased to 29,000 U.S. dollars on average in 2017 from 26,000 dollars in 2016.
"NAR survey findings on student debt released earlier this fall revealed that an overwhelming majority of millennials with student debt believe it's delaying their ability to buy a home, and typically for seven years," Yun said.
"Solid economic conditions and millennials in their prime buying years should be translating to a lot more sales to first-timers, but the unfortunate reality is that the nation's homeownership rate will remain suppressed until entry-level supply conditions increase enough to improve overall affordability," he added.
