First Time Home Buying Surges

First time home buying surges after first-time home buyers purchased 601,000 single-family homes compared to 567,000 during 3Q’16, an increase of 6%, resulting in the highest quarterly purchase volume since September 30, 2000, according to the Genworth Mortgage Insurance First-Time Homebuyer Market Report for the third quarter of 2017. It was the highest level of first-time home buyer demand since the third quarter of 2000.

First-time home buyers accounted for 40% of all single-family homes sold and 56% of all purchase mortgages financed.

First Time Home Buying Surges

CAD Pro and First Time Home Buyers

First Time Home Buying Surges and Repeat Buyers Decline

For the first time since 2011, repeat home buyer demand declined. This group bought 5% fewer homes during the quarter (888,000) compared to 3Q’16, this factor has been attributed to the first time home buying surges.

Low-down-payment mortgages financed 467,000 sales to first-time home buyers, which is the most loans in a quarter since the third quarter of 1999.

The private mortgage insurance industry insured 181,000 loans to first-time home buyers during 3Q’17, its highest level since the second quarter of 2007 and a 19% increase from 3Q’16. It represented the fastest-growing source of credit to first-time home buyers in the mortgage industry. This compares to 197,000 FHA loans for the quarter, a six percent decrease from 3Q’16. These are additional factors that have contributed to the first time home buying surges.

“While supply shortages continue to inflate home pricing, first-time home buyer demand continues to increase because of a greater sense of urgency from rental and home price inflation, and greater housing need due to family formation,” said Tian Liu, chief economist at Genworth Mortgage Insurance. “First-time home buyers see more value in home ownership beyond a simple financial return on their investment.”

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