First-time buyers sitting out mortgage game

Hand signing mortgage next to house

We all know the housing market has been frightening. And even as other areas of the economy recover, many people I know still are reluctant to buy their first home.

They’d rather keep renting than take on a mortgage even though their families are expanding.

They still want to own a home, but instead they're sitting out, like many other first-time home buyers.

First-time buyers purchased 33% of the existing homes sold in March, according to the National Association of Realtors. That's a big drop from 2010, when a record 50% of all home sales were made to people who had never before owned a house, according to the organization.

That record was built "on (the) success of the home buyer tax credit which began in 2009," the association said.

Those tax credits -- which provided up to $8,000 to first-time buyers -- are now gone. In total, the credits were worth more than $27 billion to almost 3.9 million taxpayers, The Associated Press reported.

Still, the fact they're now gone has disappointed a lot of people who were looking for a break.

Lending requirements also have changed, and many people have been through a lot credit-wise, so their scores are not where lenders would like them to be (the best mortgage rates go to borrowers with credit scores higher than 760).

Plus, most lenders want a much bigger down payment of as much as 20%.

I wonder what other reasons people have for holding back.

Maybe you're waiting for the right home. Maybe you prefer to rent and live free of worrying about upkeep.

Caution is good but avoidance is another story. What’s your story?

For myself, I am grateful to have a little slice of the American dream, even if I have to keep footing the home loan bill for many years to come.

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