The lack of homes for sale in Boston and throughout the state of Massachusetts is creating an extremely competitive market that’s leaving out first-time buyers. In fact, the Massachusetts Association of Realtors reports that new homeowners in the Bay State comprise the smallest market share since 2003.
The percentage of first-time buyers in Massachusetts dipped from 41 percent in 2015 to just 35 percent in 2016.
Comparing Massachusetts to the rest of the country
The national percentage of new homeowners matched that of Massachusetts at 35 percent in 2016. However, the nationwide figure is up from 32 percent in 2015.
The average age of a home buyer in the U.S. is 44 with a median household income in 2016 of $88,500. In Massachusetts, the average age of a buyer is 45 with a median household income of $97,700.
Across Massachusetts, married couples compose 58 percent of homeowners, compared to 66 percent of married couples nationwide. Multi-generational home ownership stands at 14 percent in Massachusetts, which is slightly higher than the 11 percent national average.
Home ownership is not as prevalent as it used to be. The Census Bureau reports that just 63.7 percent of Americans own their homes today, marking the lowest level since 1965.
First-time buyers are critical to the market
When the available housing supply is scarce, as it is in Massachusetts and particularly in Boston, competition heats up along with higher asking prices. First-time buyers help people who own starter homes make a sale and move into larger houses. However, those newbies are having difficulty entering the system.
Northeastern hubs like Boston are looking to retain young people who are starting families of their own. However, when first-time buyers can’t find a home to settle into, keeping those young adults in the area can be difficult. Consequently, this poses challenges for businesses to attract top talent.
Despite this reality, first-time buyers who successfully close on a house sooner than later will benefit in the long-term from low interest rates. Happy hunting!