Though the housing market is rebounding in many markets, one important segment is not: First-time buyers represent a smaller proportion of overall sales activity than their historical norm.

Whereas first-timers typically account for roughly 40 percent of sales, lately they’ve been involved in 30 to 35 percent, depending on the source of the data. Lawrence Yun, chief economist for the National Association of Realtors, estimates there were 2.2 million fewer first-time purchasers in the U.S. between 2008 and 2012 – a deficit of about 450,000 a year.

Recent surveys of Realtor members by Yun’s research team have found that first-time purchases slipped to just 30 percent during each of the last three months. Mortgage investment giant Freddie Mac reports that first-time purchasers represented just 35.9 percent of loan acquisitions by the firm in 2011. Last year the Federal Reserve found that whereas between 1999 and 2001, about 17 percent of 29-34-year-olds took out a mortgage for a first home, the figure plunged to 9 percent during 2009-2011.

Lack of entry buyers slows market

All of this represents a significant issue for homeowners and sellers. Without entry-level purchasers, the housing system doesn’t work well. If there’s no one to buy moderately priced starter homes, the owners of those houses can’t sell and move up.

Where are these first-timers who should be jumping in while mortgage interest rates are near all-time lows and prices in some markets are still at 2004-05 levels? Recent economic jolts – the recession and relatively high unemployment rates for younger workers – are crucial factors. Disproportionate numbers of 20- and 30-somethings have moved back home with parents, or are renting with others.

Tougher underwriting and qualification requirements by the banks are also important contributors. Fed Chairman Ben Bernanke has said so, and President Obama singled out tight lending standards – even for borrowers with solid credit – as an issue in his State of the Union address.

There’s another financial albatross: massive student debts and their toxic interaction with lenders’ stringent rules on “debt-to-income” ratios.

Average debt of $26,682

Student loan debt loads have exploded in the past decade. A Pew Research study last fall found that the average student debt balance is $26,682, and that more than one in 10 graduates are carrying close to $62,000 in unpaid student loans. Both numbers are up sharply from five years earlier.

Lenders and realty agents who work with first-time purchasers say student debts that many bring to the table are often deal-killers because they can’t qualify under current debt-to-income limits.

“Even a $30,000 or $40,000 debt can mean you don’t make the cut,” said Paul Skeens, president of Colonial Mortgage Group in Waldorf, Md. Lenders typically look at two measures of debt-to-income to help gauge creditworthiness: the monthly costs of the proposed new mortgage compared with household income; and total recurring household debts – credit cards, auto, student loans and the new mortgage. If you have $3,000 a month in recurring debt payments and $6,000 a month in household income, you’ve got a total debt-to-income ratio of 50 percent.

Under current lending standards, a total debt ratio of 43 percent is about as high as an applicant for a conventional loan can go, absent strong compensating factors such as lots of money in the bank – something most first-timers sorely lack.

FHA-insured mortgages offer a bit more flexibility, says Skeens, who recommends them for buyers with student debts, but usually after the applicants negotiate a deferral of payments if the balances are troublesome.

Good advice for first-timers carrying student debt: Check out FHA. Keep your offers simple. And work with an agent who knows how to navigate you through today’s perilous underwriting shoals.