Skip to main content

2.38 Million Americans Became First-time Homebuyers In 2020

Navi Persaud
Mar 23, 2021
Photo of a suburban house.

Genworth Mortgage Insurance released the 15th edition of its First-Time Homebuyer Market Report, for the fourth quarter and full-year of 2020. According to the report, 2.38 million Americans became first-time homebuyers in 2020––up 14% from the same period a year ago.

In Q4 2020, 657,000 single-family homes were purchased––up 26.4% from a year ago. Additionally, Genworth chief economist, Tian Liu revealed that first-time homebuyers reached 2.76 million (seasonally-adjusted annual rate) in Q4, their fastest pace on record. First-time homebuyers represented a bigger share of the housing market. According to the report, for the full year, first-time homebuyers made up (40% vs. 38% in 2019) in the single-family housing market, and a higher percentage of purchase loan borrowers (56% vs. 55% in 2019) in the mortgage market.

"Out of 2020 came a housing boom with rapidly rising home prices and a new construction boom in single-family homes," said Liu. "More recently, despite the COVID-19 pandemic and a deep recession, the U.S. housing market has staged an unexpected and strong rebound in the second half of 2020, resulting in a record number of first-time homebuyers."

Liu also added that first-time homebuyer demographics are maturing. The aging of the Millennial population implies that the increase in first-time homebuyers over the age of 30 may lead to an overall increase in the number of first-time homebuyers in the 25-44 age group, which could be in the order of 580,000 first-time homebuyers over five years, according to the report.

"The pandemic and resulting economic impact increased housing demand in many ways. Working from home, remote learning, and other social distancing measures have forced homes to become the end all be all, ultimately resulting in an increase in a home's value to homebuyers. Large expenditures on travel, leisure, entertainment, and personal services have decreased significantly throughout the pandemic, freeing up disposable income to be used toward housing. While the unemployment rate has increased overall, its impact has been more muted on higher-income earners who are more likely to become potential homebuyers – so the job losses have had less effect on housing," said Liu.

"Potential homebuyers may have benefitted from pandemic-related forbearance programs on student loans, credit cards, and auto loans, temporarily reducing debt repayment for some. The real estate and housing finance industries have successfully maintained the functioning of the housing market by reducing the number of face-to-face interactions in homebuying, selling, and financing. The forbearance program in the mortgage industry prevented foreclosures by borrowers impacted by the pandemic and helped stabilize the housing market. Finally, fiscal stimulus under the CARES Act helped to maintain spending and income levels, which prevented spillover from the public health crisis into a broader economic and housing crisis. Together, all of these factors made 2020 the best year on record for the first-time homebuyer market."

Click here to view the full report.

Published
Mar 23, 2021
400 Mortgage Loan Originators Caught Trying To Skip School

400 mortgage loan originators nationwide deceptively claimed to have completed their annual continuing education as required by state and federal law.

Industry News
Jan 19, 2022
Infamous Better.com CEO Is Back And Employees Are Upset

After a month-long hiatus or “break” as Garg likes to call it, the CEO is back at the helm of the company.

Industry News
Jan 19, 2022
Capacity Closes $38M In Series C Funding, Surpasses $62M In Total Capital Raised

AI-powered automation platform, Capacity, announced an additional $27 million in Series C funding, closing out the round at more than $38 million.

Tech
Jan 19, 2022
Millennials Are Still Powering The Housing Market

First American Financial Corporation's Potential Home Sales Model for Dec. 2021 revealed that millennial demand is propelling the housing market, thanks to low rates and increased geographic flexibility.

Analysis and Data
Jan 19, 2022
Open Mortgage Adds A Chief Revenue Officer

Scott Harkless will spearhead all wholesale and retail sales functions for the national multi-channel mortgage lender.

Industry News
Jan 19, 2022
Home Builder Confidence Dips Due To Inflation And Supply Chain Concerns

Home builder confidence in the market for newly built, single-family homes fell by one point to 83 in January 2022, according to the National Association of Home Builders and Wells Fargo's Housing Market Index report.

Construction
Jan 18, 2022