N.A.R Survey Highlights Decline in First-Time Buyers

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First-Time Buyers :The National Association of Realtors®

Has just released the results of its annual survey, revealing key trends among homebuyers and sellers. The survey sheds light on changing dynamics in the housing market, from buyer demographics to seller motivations. First-time buyers have decreased to just 24% of the market share, marking the lowest level since the NAR began tracking data in 1981. The typical age of first-time buyers has risen to 38 years old, while repeat buyers are now averaging 61 years.

The challenges first-time buyers face are becoming more pronounced, as rising home prices and interest rates make it increasingly difficult for them to enter the market. Family dynamics are also shifting—73% of recent buyers had no children under 18 in the home, the highest share ever recorded. Meanwhile, 17% of buyers, including some first-time buyers, purchased multigenerational homes, driven by factors like cost savings and caring for aging parents.

This trend shows how first-time buyers are being impacted by broader social and economic shifts. In previous years, first-time buyers were more likely to enter the market at a younger age, but current conditions have altered their plans and timelines. Rising interest rates have created more hurdles for first-time buyers, pushing many to delay their purchases or consider alternative living arrangements, such as co-buying with family members.

On the selling side, the typical seller is now 63 years old, and many cited the desire to move closer to family or friends. The challenges facing first-time buyers are also affecting sellers, as fewer first-time buyers entering the market translates to a narrower pool of potential buyers for lower-priced homes. Additionally, 36% of sellers traded up for a larger home, while 68% reported being very satisfied with the process.

For first-time buyers looking to purchase a home, affordability remains a significant barrier. The survey highlights that many first-time buyers are now older than in previous years, reflecting the extra time it takes to save for a down payment and meet lending requirements. These factors contribute to the challenges first-time buyers encounter as they navigate today’s housing landscape.

Despite these obstacles, first-time buyers are still eager to achieve homeownership, and some are exploring creative solutions, such as purchasing fixer-uppers or homes in more affordable areas. However, the path for first-time buyers remains challenging, underscoring the importance of financial preparedness and long-term planning for those aiming to enter the housing market.

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Opendoor Cuts 17% Workforce Amid Losses

Opendoor, the San Francisco-based real estate tech company once valued at $18 billion, is making significant cuts as losses continue to mount. The company announced today that it will lay off 300 workers—17% of its workforce—amid ongoing financial struggles. The layoffs, revealed by CEO Carrie Wheeler in a letter to shareholders, are part of a broader effort to address challenges in the housing market.

The company, which has already laid off nearly 1,100 employees over the past year, is grappling with a tough real estate environment, with high interest rates slowing home sales and added pressure from California’s property tax laws and insurance issues. Despite these cuts, Opendoor reported a loss of $278 million for the first nine months of 2023.

Opendoor spokesperson Rebeccah Propp stated that the layoffs are aimed at adapting the company’s cost structure to ensure a ‘simple and certain home-selling experience’ for its customers. The company expects to save $50 million annually through these reductions. However, the firm’s market value has plummeted from $18 billion to just $1.3 billion, and it has yet to turn a profit.

Opendoor joins a growing list of companies impacted by the wave of SPAC-related public listings, which, though initially bringing in large amounts of cash, have often resulted in sharp stock declines and layoffs.

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Fathom Holdings Revamps Leadership Amid Struggles

Fathom Holdings is making significant leadership changes as the company faces tough market conditions. Jon Gwin, formerly the company’s Chief Operating Officer, has been appointed Chief Revenue Officer. In his new role, Gwin will focus on driving revenue and strategic partnerships across Fathom’s real estate, mortgage, and title divisions. With nearly a decade of industry experience, Gwin will look to steer the company through its challenges and strengthen its market position.

Samantha Giuggio, who was Chief Operations Officer of Fathom Realty, has been promoted to President of Fathom Realty and Chief Operations Officer of Fathom Holdings. Giuggio brings over 14 years of experience to her expanded role, focused on improving operational efficiency and agent productivity.

However, as we reported yesterday, shareholders of Fathom Holdings have faced a tough month, with the company’s share price dropping 27%, erasing earlier gains. Over the past year, Fathom stock has declined by 43%. Despite this, Fathom’s low price-to-sales ratio of just 0.1x may indicate the company is undervalued compared to the broader U.S. real estate sector, where P/S ratios are typically much higher.

Fathom’s revenue has been shrinking, with a 10% decline last year, and analysts expect only modest growth in the coming year. While its tech-driven real estate model remains competitive, market skepticism about future growth continues to weigh on its stock price.

As Fathom adapts to these challenges, the company hopes these leadership changes will help turn things around. 

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