Single-family home sales increased 6% in the fourth quarter of 2019 compared with a year earlier, according to according to Genworth Mortgage Insurance’s First-Time Homebuyer Report.
About 517,000 single-family homes were purchased in the fourth quarter, according to the report.
For the full year 2019, first-time homebuyers reached 2.18 million – the fastest pace since 2006.
It was the third consecutive year that the number of first-time homebuyers exceeded 2 million.
“The housing market is in the middle of a multi-year boom in the first-time homebuyer market,” says Tian Liu, chief economist, Genworth Mortgage Insurance. “The market has exceeded two million first-time homebuyers each year for the past three years, which is unprecedented in the past 26 years. In part, this represents a long overdue rebound from the trough earlier in the decade.”
In 2019, 38% of all home buyers were first-time homebuyers.
But the share increases dramatically when there’s a mortgage: 56% of purchase borrowers were first-time homebuyers.
As the millennials age, Genworth expects to see increasing homebuyer activity in the 25-44 age group.
This group will generate about 580,000 first-time homebuyers over the next five years, the firm predicts.
“The tremendous growth in the first-time homebuyer market over the past five years shows that first-time homebuyers have been busy building careers, and places with abundant job opportunities are very attractive to first-time homebuyers,” Liu says. “But the sheer size of the market and the delay in expanding housing supply means that a first-time homebuyer’s paradise, a place with abundant job opportunity and highly-affordable housing, is difficult to find.
“Markets with abundant job opportunities and acute affordability challenges also are markets with the most opportunities to expand supply and policy intervention,” Liu says. “In the meantime, first-time homebuyers may have to compromise between job opportunities and housing affordability.”