First-time home buyers are seeing better market conditions these days, according to a new analysis. The data shows the inventory of available entry-level homes has grown 4.5 percent over the past year, with price cuts rising and bidding wars falling. That means buyers have more negotiating power and more options. But while that may be the case, it hasn’t resulted in an uptick in starter-home sales. In fact, sales fell in May. On the other end of the market, though, luxury home sales spiked – moving 6.2 percent higher year-over-year during the same period. So, what’s behind the divergence? Well, the simple explanation is that first-time home buyers are more susceptible to overall economic conditions and are likely feeling more financial pressure than buyers shopping in the luxury market, who are less affected by the economy, mortgage rate fluctuations, and the upfront costs of buying a home. (source)
