Just over three out of five, 60.9%, of mortgage offers went to first-time homebuyers among those using online lending marketplace LendingTree’s platform in 2024.
That figure is down from 65.3% in 2023, and analysts noted last year’s housing market was “sluggish.” LendingTree analysts wrote: “Even though newcomers made up a large share of buyers, 2024’s market wasn’t necessarily flooded by massive numbers of them.”
Loan originators can expect first-time homebuyers to have lower credit scores, down payments, and mortgage amounts than repeat buyers do. LendingTree pointed out:
- Credit scores for first-time buyers were 32 points lower on average than those of repeat buyers (700 versus 732, respectively),
- First-time homebuyers’ down payments on homes were a remarkable average of nearly $63,500 less than those of repeat buyers ($47,654 versus $111,103), and
- Loan amounts for first-time homebuyers were an average of $56,131 less than loans for repeat buyers ($321,818 compared to $377,949).
"It makes all the sense in the world that most mortgage offers would go to first-time buyers today. So many homeowners likely feel trapped because they bought their current place when rates were really low,” said LendingTree's Chief Consumer Finance Analyst, Matt Schulz.
“They don't want to trade their current low-rate deal for today's much higher rates, so they just don't move,” he added. “First-time buyers don't have that problem."
By generation, according to the analysis, the lion’s share of mortgage offers for first-time buyers went to Millennials aged 28 to 43; these homebuyers got almost half, 49.7%, of offers. Behind that generation, 29.0% of mortgage offers for first-time homebuyers went to Gen Zers aged 18 to 27; 16.5% went to Gen Xers aged 44 to 59; and 4.7% went to Baby Boomers aged 60 to 78.
LendingTree’s analysis revealed more intricate details of first-time homebuyers by state. New York, for example, had the largest share of mortgage offers of any state (76.1%) go to first time buyers in 2024. There, first-time homebuyers had an average credit score of 709, an average down payment of $81,188, and an average loan amount offered of $375,534.
Behind New York was California, which had 70.0% of mortgage offers go to first-time homebuyers in 2024. Those buyers had an average credit score of 713, an average down payment of $94,967, and an average loan amount offered of $518,883.
On the other side of the coin, the state that saw the lowest share (47.1%) of mortgage offers go to first-time buyers in 2024 was Alaska. LendingTree analysts noted that was “a significant drop” from 54.4% in 2023 for Alaska, which was also the only state with less than 50% of mortgage offers going to first-time buyers.
In that state, first-time homebuyers had an average credit score of 705, an average down payment of $27,529, and an average loan amount offered of $316,063.
LendingTree also had some advice for first-time homebuyers to be successful in making a purchase, including:
- Take time to prepare, doing things like saving for a down payment, strengthening your credit score, and hunting for houses.
- If eligible, take advantage of first-time buyers programs that can help get more favorable loan terms and reduce upfront costs.
- Shop around for a mortgage, since different lenders can offer different rates to the same borrowers.
