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Many say it's a bad time to buy a house. So who's still going for it?

ARI SHAPIRO, HOST:

Anyone shopping for a home right now has to contend with a combination of high prices and high interest rates. To make matters worse, there are not a lot of homes on the market to choose from. One recent survey found 85% of Americans think it's a bad time to buy a home. So who is taking the plunge? NPR's Scott Horsley reports on a new snapshot from the National Association of REALTORS.

SCOTT HORSLEY, BYLINE: The snapshot says first-time buyers accounted for about a third of all homes sold during the 12 months ending in June. Lance Zaldivar and his fiancee started looking for their first home at the beginning of the year, around the time Zaldivar got out of the Marine Corps. He'd managed to sock away some money during his last deployment in Kosovo, and his fiancee also had some savings from her job as a nurse practitioner.

LANCE ZALDIVAR: My fiancee was a little bit pickier than I am, and at this point now, I'm glad that she was. She was looking for a little bit of a yard, a little bit larger square footage inside the house, somewhere that we can raise a family in.

HORSLEY: The couple found a three-bedroom split level in Montgomery County, Texas, north of Houston, for $245,000, well below the national average. Their mortgage rate will be 6.25%, but they paid up front to get a lower rate for the first two years while Zaldivar finishes his bachelor's degree.

ZALDIVAR: I was real happy about that, so that eased my concern compared to some of the other interest rates that I've seen.

HORSLEY: Average mortgage rates have since climbed even higher, nearing 8% this fall before settling back to 7.5% last week. Rising interest rates have put homes out of reach for many would-be buyers. They've also discouraged people who already own homes from selling and giving up their cheaper loans. Kristina Dunlap says there wasn't much to choose from when she and her husband began looking for a house this year, but after three years of renting in Nashville, the couple was determined to buy a place.

KRISTINA DUNLAP: We calculated how much we had spent in rent over three years, essentially, and I think that number was a lot scarier than what the interest rates are right now.

HORSLEY: Dunlap is a freelance marketer, and her husband is a construction manager. They thought about buying a fixer upper, but decided that was more work than they wanted. So they opted for a newly built home near Springfield, about 25 minutes north of Nashville.

DUNLAP: The whole neighborhood is still under construction, actually, at the moment. We don't even have paved roads currently.

HORSLEY: About 13% of all the homes sold this past year were newly built. That's an increase from the year before. Like many successful buyers, Dunlap made trade-offs - moving farther from the center of town and giving up the bonus room she was hoping for. She did get the open floor plan and the two-car garage she wanted, as well as a yard for her dog, Cujo.

DUNLAP: The yard was a must because when he gets - I call them his zoomies. When he gets those twice a day, we just send him out there and let him run it all out.

HORSLEY: The sales price was just under $350,000, so the Dunlaps needed about 30,000 to cover the 6% down payment and closing costs. According to the realtors report, coming up with a down payment is the biggest challenge for many first-time buyers, especially those who are saddled with high rent and student loans. Seventy percent of all buyers did not have children under 18 living at home. Jessica Lewis, who's deputy chief economist at the realtors association, says the average income for all home buyers this past year hit a record high - $107,000. That highlights the challenges that middle-income people face in buying a home.

JESSICA LAUTZ: Down payment, finding that right home, inventory is still incredibly tight. We know that they have a hard time especially finding an affordable property. But these home buyers are somehow making it work and getting in there.

HORSLEY: Lance Zaldivar and his fiancee moved into their new house in June and wasted no time unpacking. While the average home buyer plans to stay in a house for 15 years, Zaldivar plans to be there a lot longer.

ZALDIVAR: Whenever we do have a family - grandkids, great grandkids - you know, they can always come over to to our place. And it'll be a home for the Zaldivars.

HORSLEY: He likes being able to wave to people in his neighborhood and have them smile and wave back. Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

Scott Horsley
Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.