First-time homebuyers are being hit hard by a global slowdown in the U.S. housing market, National Housing Conference CEO David Dworkin told FOX Business’ Neil Cavuto.
“It’s hard to get financing for mortgages that are smaller,” Dworkin said Thursday. "First-time buyers are the ones who are struggling most."
One in four first-time homebuyers get help from family members because they can’t afford to purchase a home on their own. “If you don’t have support from multigenerational wealth,” Dworkin says you’re most likely out of luck.
London home prices are down 4.4 percent since 2018 and the decline eerily resembles what occurred in the U.S. 10 years ago right before the housing crisis. Many fear that this can lead to another slowdown, but Dworkin doesn’t find it concerning.
“What we’re seeing in high-value markets like London, New York and San Francisco is really different than most of the rest of the country,”
Dworkin also noted that in neighborhoods where it’s too difficult to buy, there is additional pressure in the rental markets.
Another factor that hurts the rental market is investors who buy up single-family homes for rental, adding more competition to the market.
“If you’re a first-time homebuyer, you have to get a mortgage and [investors] are coming in with cash, [therefore] it’s not much of a choice for the seller,” Dworkin said.
Another area of the housing market affected is supply and demand.
“Were building a quarter of a million units less than what we need just to break even every year,” Dworkin said, highlighting the lack of housing for the number of people who need it.
Historically, homebuilding rates are half a million per year. If rates continue to decline people are going to stop buying.
As Dworkin put it, “It’s like if you had twice as much money, but there was nothing in the store, you’re not going to buy anymore."