85% of Market Growth
The impact of first-time buyers on the American housing market has been highlighted in a new report from mortgage insurer Genworth. The data shows that in the first quarter of 2017, first-time buyers bought the most single-family homes since 2005; 424,000 or 38%. It was an 11% rise from the first quarter of 2016.
“Over the past three years, first-time homebuyers have accounted for 85% of the growth in home sales, and have become an important indicator for understanding market trends,” said Tian Liu, Chief Economist for Genworth Mortgage Insurance. “Their impact has already been felt in falling inventory and rising home prices, and we expect them to increasingly drive growth to businesses most exposed to this market segment.”
The figures also reveal that 3 million potential homebuyers are missing from the market following the financial crisis. This pent-up demand is set to lead to a surge of first-time buyers ahead. Genworth says it is the first report of its kind, looking at data from the past 20 years, tracking home sales to first-time homebuyers on a monthly basis and reporting at quarterly intervals, and separately identifying first-time homebuyers enabled by low down payment mortgages, such as conventional loans with mortgage insurance coverage, FHA loans, VA loans, and USDA loans.