Survey shows tight credit conditions for homeowners

A recent survey from the National Association of Realtors found a restrictive mortgage credit environment has resulted in new homeowners living within their means with notably higher incomes and modestly higher downpayments compared to previous years. The credit environment, however, has pushed many potential homebuyers out of the market due to the heightened lending requirements.

NAR president Ron Phipps said financing obstacles have increased for first-time homebuyers.

"First-time homebuyers fell to a 37 percent market share in the past year from a record high 50 percent in the 2010 study," said Phipps. "Although last year's findings were boosted by the home buyer tax credit, long-term survey averages show that four out of 10 buyers are typically first-time buyers."

The study found the median age for first-time buyers is 3 with a median income of $62,400, up from $59,900 in the 2010 study.

In response to the added financing obstacles homebuyers are facing, realtors are working with borrowers to overcome the hurdles presented in qualifying for a mortgage. The NAR found 18 percent of its members have experienced contract failures in the past few months, which is double the number reported in 2010. The NAR is working with policymakers to ensure mortgages are becoming more affordable for borrowers. 

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