Despite recent declines in home sales, sluggish growth in single-family home construction, and mounting affordability concerns, first-time buyers are outperforming other segments of the market, according to a new report released by Genworth Mortgage Insurance. “The first-time home buyer market has been more resilient during the [housing] slowdown compared to repeat buyers,” writes Tian Liu, chief economist at Genworth Mortgage Insurance.
About 482,000 first-time buyers purchased homes in the fourth quarter of 2018. Though that’s 3 percent lower than a year ago, it bests the 7 percent year-over-year decline in repeat buyer activity, according to the report. “This is a reminder that first-time home buyers differ from other buyer groups in terms of why they buy,” Liu notes. “Their purchase decisions are more likely driven by the fact that many are starting families and reaching peak homebuying ages. Even when they face common challenges such as falling affordability, first-time home buyers and repeat buyers may respond differently, as demonstrated by first-time home buyers’ outperformance.”
First-time buyers accounted for 56 percent of mortgage borrowers in the fourth quarter of 2018 and 39 percent of buyers in the overall home sale market, according to the report. They made 2.07 million home purchases in 2018—higher than their pre-recession level.
Home buyers are still increasingly concerned about affordability and rising home prices. However, sales of lower-priced homes reportedly grew nationwide in the fourth quarter as buyers looked for more affordable options, the report notes. “Looking at the full year and the longer term for the first-time home buyer market provides more reason for optimism,” Liu notes. “There remains a large number of ‘missing’ first-time home buyers who have not returned to the market in the aftermath of the housing crisis, and many young people are reaching their peak homebuying ages now, leaving them poised to buy over the coming years.”
I read this article at: Reatlor Magazine
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