A recent National Association of Realtors report has shown that first-time home buyers are finding difficulty trying to enter the housing market, which may in turn affect small business performance over the coming years. According to the report, existing home sales jumped to their highest levels since 2007 – undoubtedly good news for the economy – but first-time buyers struggled to gain access to the market. Furthermore, those trying to invest in homes using financing and mortgages are still having a difficult time gaining financial help and ultimately being able to afford a house, PBS reported.
The report found first-time home purchases accounted for just 28 percent of home sales in August, down from 31 percent in August 2012.
Lawrence Yun, the Association’s chief economist, said these numbers are too low for an economic recovery period.
“First-time buyers should be closer to 40 percent of the market, but they’re held back by the frictions of tight credit and very limited inventory in the lower price ranges in most of the U.S.,” Yun said.
Possible small business effects
As consumers face financial hardship and housing troubles, small businesses may experience fallouts including drops in sales. It is a general trend in the U.S. and global economy that when consumers are experiencing personal financial difficulties they tend to cut spending on everything but the essentials, which can greatly impact small business performance.
Making things harder for small business owners is the continued tightened lending standards by traditional financial institutions like big banks and even local credit unions. Without proper financing, entrepreneurs often find it difficult to keep their doors open while waiting for spending to recover.
If a small business owner is having trouble funding company operations, they can come to National Funding for assistance. National Funding can help with small business loans and can also provide a merchant cash advance for business to promote company success.