Strong Activity in First-Time Homebuyer Market; Growth Shifting to Second-Time Homebuyers

Sturdy Exercise in First-Time Homebuyer Market; Development Shifting to Second-Time Homebuyers

RICHMOND, Va., March 17, 2020 /PRNewswire/ — Genworth Mortgage Insurance coverage, an working section of Genworth Monetary, Inc. (NYSE: GNW), as we speak launched the 12th version of the First-Time Homebuyer Market Report, authored by its Chief Economist, Tian Liu, for the fourth quarter of 2019. The report aggregates all publicly obtainable authorities knowledge and proprietary mortgage trade knowledge into one digestible report. The total evaluation might be seen at https://miblog.genworth.com/first-time-homebuyer-market-report/.

4Q and 2019 Full 12 months Overview

  • First-time homebuyer market exercise robust in This autumn: 517,000 single-family properties have been bought––up six p.c from a yr in the past; First-time homebuyers reached 2.18 million seasonally-adjusted annual fee in This autumn, their quickest tempo since 2006
  • First-time homebuyer market in the course of a increase: A stronger second half pushed the first-time homebuyer market to a robust full yr results of 2.09 million. For the third consecutive yr, the variety of first-time homebuyers exceeded 2 million, unprecedented prior to now 26 years.
  • An important buyer section for the housing trade: In 2019, 38 p.c of all homebuyers and 56 p.c of buy debtors are first-time homebuyers
  • First-time homebuyer demographics maturing: The getting old of the Millennial inhabitants implies that the rise in first-time homebuyers over the age of 30 will seemingly result in an general improve within the variety of first-time homebuyers within the 25-44 age group within the order of 580,000 first-time homebuyers over 5 years
  • First-time homebuyer progress turning headwind into tailwind for the second-time homebuyer market: The pool of potential second-time homebuyers elevated for the first-time since 2008 to eight.3 million in 2019 and can develop by over three million in 5 years
  • Sturdy first-time homebuyer developments throughout states: States with quick job progress reported first-time homebuyer progress charges of 44 p.c between 2014 and 2019, in comparison with the 37 p.c progress fee for states with gradual job progress
  • Bettering housing affordability offering a greater atmosphere for first-time homebuyers: Along with decrease mortgage charges, housing affordability additionally improved as homebuilders expanded constructing exercise by 16 p.c within the $200,000 to $400,000 value vary, resulting in the quickest progress in new properties bought since 2016
  • Low-down cost mortgages important for first-time homebuyers: Financed 1.66 million (80 p.c) first-time homebuyers in 2019, up one p.c from 2018; Second largest yr for the low-down cost mortgage market in historical past
  • Non-public Mortgage Insurance coverage (PMI) most-sold product: 720,000 first-time homebuyers used typical mortgages with PMI to finance their first house buy in 2019, up 5 p.c from a yr in the past 
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Feedback from Tian Liu, Chief Economist, Genworth Mortgage Insurance coverage
“The housing market is in the course of a multi-year increase within the first-time homebuyer market. The market has exceeded 2 million first-time homebuyers every year for the previous three years, which is unprecedented prior to now 26 years. Partially, this represents an extended overdue rebound from the trough earlier within the decade.”

“The primary-time homebuyer market gives necessary insights into the housing market. With 38 p.c of house gross sales and 56 p.c of buy loans in 2019, it’s a market too huge to disregard. I see the development towards extra reasonable properties by homebuilders and a traditionally massive PMI market as two outcomes of the increase within the first-time homebuyer market.”

“One other characteristic of the housing market from the previous 5 years is a scarcity of house owner mobility, which has resulted in a flat repeat-buyer market in the course of usually favorable financial situations. The development within the first-time homebuyer market gives a proof and a prediction. A chronic melancholy within the first-time homebuyer market between 2007 and 2015 led to a pointy lower within the pool of potential second-time homebuyers, leading to decrease house owner mobility. However the robust progress in the previous couple of years predicts that the repeat-buyer market and mobility ought to get well over the following 5 years.”

“The large progress within the first-time homebuyer market over the previous 5 years exhibits that first-time homebuyers have been busy constructing careers, and locations with plentiful job alternatives are very engaging to first-time homebuyers. However the sheer dimension of the market and the delay in increasing housing provide signifies that a first-time homebuyer’s paradise, a spot with plentiful job alternative and highly-affordable housing, is troublesome to seek out. Markets with plentiful job alternatives and acute affordability challenges are also markets with probably the most alternatives to broaden provide and coverage intervention. Within the meantime, first-time homebuyers might should compromise between job alternatives and housing affordability.”

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About Genworth’s First-Time Homebuyer Market Report
The First-Time Homebuyer Market Report is the one financial sequence measuring the variety of house gross sales and mortgages to first-time homebuyers overlaying the whole housing market. This report supplies quarterly estimates of the first-time homebuyer market for the reason that first quarter of 1994—spanning two housing cycles and 24 years. It supplies a historic perspective vital to grasp as we speak’s first-time homebuyer market. It’s based mostly on a pattern dimension of 23.2 million first-time homebuyers from authorities studies and trade knowledge. By capturing the whole market over an extended interval, and offering the newest market snapshot, this report makes the first-time homebuyer market extra seen to housing trade contributors and policymakers.

For entry to the complete report and charts, go to: https://miblog.genworth.com/first-time-homebuyer-market-report/

About Genworth Mortgage Insurance coverage
Genworth Mortgage Insurance coverage, an working section of Genworth Monetary, Inc. (NYSE: GNW), is headquartered in Raleigh, North Carolina, and operates in all 50 states and the District of Columbia. Genworth Mortgage Insurance coverage works with lenders and different companions to assist individuals responsibly obtain and preserve the dream of homeownership by guaranteeing the broad availability of reasonable low down cost mortgage loans. Genworth has been offering mortgage insurance coverage services within the U.S. since 1981.

Disclaimer
Opinions, analyses, estimates, forecasts, and different views included in these supplies are these of Tian Liu, are based mostly on present market situations and are topic to vary with out discover, don’t essentially symbolize the views of Genworth or its administration, and shouldn’t be construed as indicating Genworth’s enterprise prospects or anticipated outcomes. Neither Tian Liu nor Genworth ensures that the data offered in these supplies is correct, present, or appropriate for any specific goal. Ahead wanting statements shouldn’t be thought of as ensures or predictions of future occasions.

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SOURCE Genworth Mortgage Insurance coverage