First-time homebuyers declined year over year. We are now seeing another side effect of the inventory shortages of affordable homes. Lack of affordable homes along with the rising interest rates have caused many potential first-time homebuyers to put that purchase on hold. Ran across this article in The MReport. It cites a 2% decline in first-time homebuyers in the first quarter of 2018 from the same time in 2017.
Demand Declines Among First-time Homebuyers
Homes sold to first-time homebuyers declined year-over-year for the first time since 2014 according to the latest edition of Genworth Mortgage Insurance’s First-time Homebuyer Market Report released on Thursday.
The report, which aggregates all publicly-available government data and proprietary mortgage data into one dataset for its results, found that in Q1 of 2018, first-time homebuyers purchased 411,000 single-family homes a decline of 2 percent from the first quarter of 2017. This set of buyers also accounted for 37 percent of single-family homes sold and 57 percent of purchase mortgages financed.
“This quarter’s decline in first-time homebuyer sales reflects a slowdown in cyclical momentum as the first-time homebuyer market approached its historical norms,” said Tian Liu, Chief Economist at Genworth Mortgage Insurance. “It also reflects a shortage of available homes priced at or below the median first-time homebuyer market price of $250,000.”
Pointing to the continued pressure from inventory shortages, while homebuyer demand was easing slightly for the first time in four years. Supply pressures will continue to drive price appreciation and freeze out a large percentage of the 2.7 million first-time homebuyers who are still missing from the market.”
The report also indicated an increase in home sales without financing or all-cash transactions, even as purchase loans made by investors increased by 3 percent from last year. These numbers indicated a rise in speculative demand and otherwise a more competitive environment among potential homebuyers.
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If you are thinking that now is the time
Contact us – Let’s see what is available for you! Interest rates are still at historical lows, which won’t last forever.
