Posted by Leonard Steinberg on May 25th, 2014

First-time buyers are a diminishing sector of the housing market and now account for about 16% of new-home purchases, down from 25% – 28% between 2001 and 2007, according to the National Association of Home Builders. In the existing-home market, first-time buyers accounted for 29% of purchases in April:  That’s down from their monthly share exceeding 40%, and occasionally surpassing 50%, in 2009 and 2010 when a federal tax credit for first-time buyers was offered.

While lending standards are tougher (a good thing), more importantly, rising prices have priced many first time buyers out of the market. Wages have not kept pace with the costs of housing. And while our government continues to state that we have low inflation, anyone who lives in a larger urban center in the USA experiences a very different story. Believe it or not, housing is not factored into official inflation figures…. so what is probably the single largest cost to all Americans, especially those living in larger  cities, is being completely ignored by our beloved politicians. This is crazy. And highly deceptive. The single most important reason why New York does not have enough affordable housing is……super-high New York inflation!

It is high time to include housing costs into inflation figures.