Falling house prices and consumers' reluctance to borrow has shown up in a reduction in the average home loan size.The latest Australian Bureau of Statistics housing finance data, released yesterday, shows that the average home loan fell from $291,100 in July to $289,800 in August, and to $284,400 in September.According to CommSec economist Craig James, the fall in the average home loan size over the past 12 months, down 0.6 per cent, is the biggest year-on-year fall in a decade.While the number of dwelling commitments for owner-occupied housing rose by 2.2 per cent in September (in seasonally adjusted terms), the value of those commitments rose by just 0.7 per cent.There were a total of 51,821 dwelling commitments in September, worth $14.6 billion.One piece of good news was that the number of first-home buyers in the market has been increasing in recent months. First-home buyers made up 16.4 per cent of all dwellings financed in September - up from 15.4 per cent in August and this year's low of 14.9 per cent in February.BIS Shrapnel's managing director, Robert Mellor, said: "First-home buyers are a critical part of the story because of the flow-on effect through the rest of the market."For the five years to 2009 we had an average of 130,000 first-home buyers in the market each year. With the stimulus boost that number went up to 190,000 in 2009 and then fell back to 60,000 in 2010."We are seeing the pull-forward from the stimulus balancing out now, and first-home buyer activity is recovering. That is a big demand factor coming back into the market."