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50 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ANALYTICS THE LATEST First-time Buyer share Hits 27-year low Realtor group's study reveals new homebuyers struggle with the mortgage process and down payments. F irst-time homebuyers accounted for only about one-third of home sales in the last year as young adults continue to struggle to get a foothold in the market, ac- cording to a report from a major housing group. In its annual survey of home- buyers and sellers, the National Association of Realtors (NAR) found that only about 33 percent of home purchases in the last year were made by first-time buyers, down from 38 percent in last year's survey and the long- term average of 40 percent. The last time the share of first-time buyers was this low was in 1987, when they accounted for just 30 per- cent of all home sales, NAR said. The association's chief econo- mist, Lawrence Yun, pointed to many of the frequently cited reasons why young Americans are staying on the sidelines, including increased living costs and high debts. "Rising rents and repaying stu- dent loan debt makes saving for a down payment more difficult, especially for young adults who've experienced limited job prospects and flat wage growth since enter- ing the workforce," Yun said. Those aren't the only issues would-be homeowners have had to deal with in recent years. According to NAR, 47 percent of first-time buyers in the latest sur- vey said the mortgage application and approval process was more difficult than expected, a result of a more heavily regulated and risk-averse lending environment. For first-time buyers in 2014, the median down payment was 6 percent, less than half the median for repeat buyers. Nearly a quarter of first-time buyers said saving for that initial payment was a major hurdle, with more than half of that group citing student debt as a challenge. In addition to tapping into their own savings to make a down payment, 26 percent of first-time buyers said they re- ceived a gift from friends or rela- tives, while 6 percent took a loan from someone close to them. The vast majority—93 per- cent—of entry-level buyers opted for a fixed-rate mortgage, NAR reported, with 35 percent financ- ing their home purchase with low down payment mortgages backed by the Federal Housing Administration (FHA). That figure was down from 39 percent last year, partly due to rising insurance premiums. "Rising rents and repaying student loan debt makes saving for a down payment more difficult, especially for young adults who've experienced limited job prospects and flat wage growth since entering the workforce." —Lawrence Yun, NAR construction spending Weakens in september economists described the latest numbers as 'dismal' and 'disappointing' and lowered Q3 GDp projections. s pending on construc- tion projects fell across the United States for a second straight month in September, spurring a decline in analysts' expectations for economic growth in Q 3. The Commerce Department reported that construction spending throughout September came in at an estimated sea- sonally adjusted annual rate of $950.9 billion, down 0.4 percent from August but up 2.9 percent from a year ago. Year-to-date through September, the government esti- mates total construction outlays came to $710.1 billion, an increase of 6.1 percent over the same period last year. In a note to clients, Patrick Newport and Stephanie Karol, U.S. economists at IHS, called September's release "another disappointing report—and after adjusting for inflation, this report looks even more dismal." The pair said they "expect that third-quarter real GDP will be revised down to 3.4 percent [from an original estimate of 3.5 percent] based on this report." Among the good news in the construction industry report was a 0.4 percent bump in spending on residential projects, which totaled an adjusted annual rate of $354.8 billion. A small portion of that increase came from private homebuilding outlays. According to the Commerce Department, private residential construc- tion building was at a rate of $349.1 billion in September, up 0.4-percent month-over-month. Spending on single-family hous- ing climbed 1.1 percent to $192.5 billion, while spending for mul- tifamily projects fell 1 percent to $43.3 billion. Across all categories, spend- ing on private, nonresidential projects was down 0.6 percent for the month to a rate of just less than $331 billion. In the public sector, the gov- ernment estimates spending on home construction was up 4.7 percent from August to a rate of $5.8 billion.