First-time home buyers are playing a larger role in the housing market, but they’re finding big changes.

Thirty-nine (39) percent of home sales nationwide were from first-time home buyers during the 12-month period ending June 2012, according to the National Association of REALTORS®. That’s up from 37 percent a year earlier.

But while first-time home buyers once had a huge inventory of homes to choose from, now they’re finding tightened supplies and steeper competition for what’s left.

Housing inventories are hovering at record lows in many markets, limiting supply. First-time home buyers face increased competition from investors, who are often trying to snatch up the same bargain-priced housing deals. Investors often make all-cash offers, too, which makes it difficult for buyers requiring financing to compete against them. Also, banks have tightened up their underwriting standards, creating more hoops in just qualifying for financing.

It’s not easy to be a first-time home buyer, some say. But first-time home buyers are critical to a healthy housing market, more than one third of the buyers in today’s market are first-timers. They allow existing home owners to sell and trade up into larger homes.

Also, first-timers shouldn’t automatically settle for a Federal Housing Administration mortgage due to the low down payment requirements (usually 3.5 percent of the purchase price). The FHA can have several restrictions that makes some sellers prefer buyers who offer cash or who are using conventional loans.

First-timers also need to be able to act fast and be able to have their financing processed quickly if they are going to stay competitive. Some banks won’t sign off on mortgages for eight to 12 weeks. But many sellers won’t wait that long.

To respond to the changing housing market, first-time home buyers need agents with greater experience and strong knowledge of the local housing market to help them to compete with investors and experienced home buyers. Agnet of Accredited Buyer Representative (ABR) is certainly a very reliable indicator. Other than that, neighborhood specialist is also a good choice when it comes to hire an agent.