It's not just higher mortgage rates and lower inventory squeezing young people out of the real estate market: It's older white people who can bring cash to the deal. In its yearly profile of buyers and sellers, the National Association of Realtors says those purchasing their first home make up the smallest share of the real estate market in 41 years—26%, per CNN. White people bought 88% of the properties sold, an increase from 82% a year earlier, the New York Times reports; that's the highest proportion in 25 years. The disparity can exacerbate wealth inequality, an analyst said.
"It's hitting younger people, it's hitting lower-income people," said Austin Clemens of the Washington Center for Equitable Growth. "And we also find that this is hitting Hispanic and Black households especially hard." Those groups often are affected more by rising interest rates than people who can afford to pay cash. The median age for repeat buyers rose to 59 between July 2021 and July 2022, while the age for first-time buyers reached 36, the highest point since 1981, when the association first collected the data; this year's survey involved 4,900 buyers. The effects of the market's imbalance could be lasting.
"It's staggering what someone can lose out on when it comes to housing wealth," said Jessica Lautz of the association. In the past decade, she said, a typical homeowner has realized about $210,000 in equity. Minority groups especially lost ground in the past year. Black and Asian/Pacific Islander buyers made 5% of the home purchases, while Latino and Hispanic buyers accounted for 8%. The trends put home ownership almost out of reach for young people with a moderate income, per the Times. (Read more real estate stories.)