It turns out first-time home buyers just needed some time to save up for a down payment and start settling down. Even as mortgage rates increase slightly, more first time buyers are showing up now than in the last three years.

The average 30-year mortgage rate increased to 3.57% on Monday. According to the National Association of Realtors, the proportion of sales to first time buyers in 2016 rose to 35% from 32% in 2015.

"Fewer first-time buyers (40 percent) compared to a year ago (45 percent) indicated that the mortgage application and approval process was somewhat or much more difficult than they expected," highlighted NAR President Tom Salomone. Survey respondents indicated that debt of all types meant a median three-year delay in saving for a down payment, with first-time buyers carrying $26,000 in student debt. Roughly a quarter of first-time buyers (26%) said saving for a down payment was the toughest hurdle in the buying process.

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