NAR Credit Policy and First-Time Buyers

Happy couple with a new house

Realtors® have always believed in a safe, responsible and sustainable housing finance system where everyone who is willing and able to take on the responsibilities of homeownership has the opportunity to do so. Recent reports suggesting otherwise are grossly inaccurate.

Realtors® want to ensure that today’s buyers remain tomorrow’s homeowners, especially first-time buyers, whose market share has declined  for the third consecutive year (to 32 percent in 2015 from 33 percent last year) and remains at its lowest point in nearly three decades.

While many industry organizations support NAR’s findings about the drop in first-time buyers, there are conflicting reports about this figure in the media as other entities estimate the number of first-time buyers to be higher. That is because other organizations are using different sources of information and definitions of first-time buyers.

Here’s a look at how NAR calculates its first-time buyer figure compared to other organizations:

Definition of first-time buyers

NAR’s definition:

  • The figure is self-reported by recent homebuyers through NARs annual Profile of Home Buyers and Sellers. In 2015, NAR gathered 6,406 responses from recent homebuyers who purchased a home between July 2014 and June 2015. NAR uses a commonplace definition: buyers who have never previously owned a home.

Other organizations’ definition (such as the Federal Housing Finance Agency, Urban Institute, American Enterprise Institute and some government agencies):

  • Individuals who have not owned a home in the prior three years and divorced, single parents who repurchase.

Financing also alters the figure

NAR’s definition of first-time buyers includes those who bought using any type of financing, including all-cash. FHFA, UI and AEI’s figure only includes those individuals who took out a government-backed mortgage.

Here are some other examples that account for differences in first-time buyer figures:


There are many reasons why NAR believes first–time buyers aren’t reaching the market, including high rents and home prices impeding their ability to save for a down payment, scarce inventory for new and existing–homes in their price range, and tight credit for those who are well qualified for a mortgage.

In 2016, NAR will continue its work advancing policies that ensure all creditworthy buyers have the opportunity to pursue their dreams of homeownership in a safe, responsible way.