According to the newly released 2018 Zillow Group Report on Consumer Housing Trends, the median income for a first-time buyer in the U.S. is $72,500, compared with the national median household income of $60,700. The difference in income for first-time buyers is more pronounced when compared with their peers who didn't buy, who have a median income of $42,500.
Most buyers rely on savings to finance a down payment, but the second-highest source for a down payment comes from the proceeds from a previous home sale. Buyers entering the market for the first time don't have this resource, though, so a higher income helps them set aside enough for a down payment.
First-time home buyers tend to put down slightly smaller down payments, with a median down payment of 14.5 percent of a home's price, rather than the traditional 20 percent down payment. By comparison, 58 percent of repeat buyers put down at least 20 percent. With this smaller down payment, first-time buyers earning the median income could afford to buy a $338,000 home, meaning they could buy about 68 percent of available homes.
"Buying a home, especially for the first time, is a major step in a lot of people's lives," said Justin LaJoie, RealEstate.com General Manager. "But with home prices climbing ever higher, and inventory yet to see sustained increases, getting a foot in the door is incredibly difficult for new buyers who can't rely on selling another home to come up with a down payment."
These are the markets where first-time buyers can afford the largest and smallest shares of listings
Home-value growth in the U.S. is slowing, home price cuts are more common and for-sale inventory is up. Sounds like relief is imminent for home buyers, right? Not so fast. Mortgage rates have been steadily climbing for the past two years.
According to Zillow's November Real Estate Market Report, after nearly four years of annual declines in inventory, the number of homes for sale has now increased year-over-year for three straight months.
A handful of metro areas that spent the past year competing for Amazon's second headquarters - including Washington, D.C., one of the winners - are expected to see their home-value growth outpace the nation in the coming year.