Higher home prices, bigger monthly mortgages because of higher mortgage rates, tougher lending standards, and a squeaky tight homes inventory are paving a bumpy road for first-time buyers this year.  

That bumpy road is also leading to an increase in the number of renters. Some housing pundits predict that we’re in the fast lane to becoming a nation of renters. While that’s good news for investors, it doesn’t bode well for local economies or social factors that depend on homeowners’ culture. 

Here are a few examples of local data that serve as signposts on where things are heading. 

• Current Census data show that the number of homeowners paying more than the recommended 30% of income for housing is increasing. The pre-pandemic number here in the Tri-Cities area was 20.3%. It’s now 27.2%.  
• The number of renters paying over 30% before the pandemic was 45.1%. It has decreased to 44.9%. Renters doubling up with roommates or moving back home is driving the decline. Still, there are over 20,000 local renters paying 35% or more of their income for housing.  
• New household formations are declining. The local pre-pandemic number was 218,949. It’s now 215,079, a 2.2% decline.  

• Owner-occupied housing is declining. The local pre-pandemic number was 71.3% of all households. Since then, it has declined to 70.6%. 

There’s something else the numbers show. It’s both a challenge and an opportunity for Realtors to redouble their efforts to help first-time buyers. There are local, state, and national assistance programs that target first-timers.  

First-time buyers typically account for a third of existing home sales. They’re also an important part of the group of owners who will be trading up in a few years.