The share of first-time homebuyers fell to its lowest level this year in almost 30 years, according to the National Association of Realtors, which is out with its annual survey on the state of the housing market.

Only 33 percent of homebuyers in the past year were first-time buyers, the lowest share since 1987 and down from a long-term average of 40 percent compiled during the 33 years the trade group has been doing the survey.

The results add to the existing research and worries of housing market participants, from homeowners who want to sell, to builders and real estate agents, that the lack of first-timers in the market is dampening all levels of it. High student debt levels, expensive rents, sluggish wage growth, tepid job growth and strict credit standards are all combining to thwart activity.

"I think there's a churn in the market that's scared off a bunch of first-time buyers," said Hugh Rider, president of the Chicago Association of Realtors. "Because of the low inventory and investors swooping in buying up that same segment of the market for cash, that caused problems. Wage growth is a problem. Unemployment is a problem."

Rider is heartened, however, by the finding that 79 percent of recent borrowers said their home was a good investment.

Among those people who did buy their first home during the past year, the median age was 31 years old and the median income was $68,300, and they bought a 1,570-square-foot home that cost $169,000, according to the survey.

One other telling finding among first-time buyers: Thirty-five percent of them received a Federal Housing Administration-backed mortgage, down from 39 percent last year. FHA-backed loans had been a popular choice because of their low, 3.5 percent down-payment requirement, but the now-higher fees and insurance premiums on those loans have reduced their appeal. In 2010, 56 percent of first-time buyers received an FHA mortgage in 2010.

This year's typical repeat buyer, 53 years old and with annual earnings of $95,000, bought a 2,030-square-foot home and paid $240,000.

To perform the research, the association randomly mails a 127-question survey to homebuyers who bought a home between July 2013 and June 2014.

Time to refinance, again? Mortgage interest rates are near lows not seen in more than a year, and the most recent decline in rates has boosted the number of homeowners who may be eligible to refinance their mortgages and lock in a lower rate. Most economists expect rates to start inching back up to the 5 percent mark in the second half of 2015.

According to an analysis by Black Knight Financial Services, before the most recent declines in the interest rate on a 30-year, fixed-rate mortgage, about 6 million borrowers met the general criteria needed to refinance a mortgage. That meant they had at least 20 percent equity in the home, good credit and were up to date on their mortgage payments. They also had an interest rate that was high enough that the savings they would see were worth going through the process and costs involved in refinancing.

After touching 4.23 percent in mid-September, the average rate on a 30-year, fixed-rate mortgage has trended downward, according to Freddie Mac's weekly survey.

Black Knight looked at the population of borrowers with loans that carry interest rates of at least 4.5 percent and found that figure of 6 million potential refinancers has now swelled almost 25 percent to 7.4 million borrowers. "This is a relatively conservative assessment though, as those with current rates of 4.25 percent to 4.5 percent could arguably benefit from refinancing as well," said Trey Barnes, a senior vice president at the company. "That group adds another 1.7 million borrowers to the equation."

According to Freddie Mac, almost three-quarters of borrowers who refinanced their primary mortgages during the quarter kept their same loan amount or lowered it by bringing additional money to the table at closing. Also, 28 percent did a cash-out refinancing, the highest share in five years and an indication of how a solid run of home appreciation is giving homeowners more financial flexibility.

mepodmolik@tribune.com

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