First-time home buyers accounted for 27 percent of sales nationally in December, the lowest since the National Association of REALTORS® began tracking them in 2008. Typically, first-time home buyers account for 40 percent of the market.

Why are their numbers dwindling? Housing experts point to several hurdles, such as high student loan debt, less-than-perfect credit, low employment and wage growth, and the double-digit growth in home prices this past year.

First-time home buyers tend to purchase lower-priced homes, but they’re facing competition for those homes from all-cash investors. Cash purchases accounted for 42.1 percent of all U.S. home sales in December, up from 38.1 percent in November, and up from 18 percent a year prior, according to RealtyTrac.

Tight credit is also preventing younger home buyers from qualifying for a mortgage to buy a home, as mortgage lenders require higher down payments. FHA loans, which many first-time home buyers turn to for the low downpayment requirements, have seen their market share decrease recently after an increase in premiums and fees this year made them less attractive to some.

However, Fannie Mae and Freddie Mac are lending more to first-time buyers, according to a report from Inside Mortgage Finance. The share of financing for first-time home buyers by the mortgage giants reached 19.5 percent in December, up from 14.1 percent a year prior.

Source: CNBC