Genworth Mortgage Insurance, has released the 12th edition of the
First-Time Homebuyer Market Report, authored by Chief Economist Tian Liu, covering the fourth quarter of 2019.
The report found that first-time homebuyer market activity was strong in Q4, as 517,000 single-family homes were purchased––up six percent from a year ago. First-time homebuyers reached 2.18 million seasonally-adjusted annual rate in the fourth quarter, their fastest pace since 2006. In 2019, 38 percent of all homebuyers and 56 percent of purchase borrowers were first-time homebuyers.
The aging of the Millennial population implies that the increase in first-time homebuyers over the age of 30 will likely lead to an overall increase in the number of first-time homebuyers in the 25-44 age group in the order of 580,000 first-time homebuyers over five years.
“The housing market is in the middle of a multi-year boom in the first-time homebuyer market. The market has exceeded two million first-time homebuyers each year for the past three years, which is unprecedented in the past 26 years,” said Liu. “In part, this represents a long overdue rebound from the trough earlier in the decade.”
The pool of potential second-time homebuyers increased for the first-time since 2008 to 8.3 million in 2019 and will grow by more than three million in five years. States with fast job growth reported first-time homebuyer growth rates of 44 percent between 2014 and 2019, compared to the 37 percent growth rate for states with slow job growth.
“The first-time homebuyer market offers important insights into the housing market,” said Liu. “With 38 percent of home sales and 56 percent of purchase loans in 2019, it is a market too big to ignore. I see the trend toward more affordable homes by homebuilders and a historically large PMI market as two results of the boom in the first-time homebuyer market.”
