Genworth Mortgage Insurance’s First-Time Homebuyer Market Report for the second quarter of 2020 shows that first-time home-buyer activity decreased largely due to the economic slowdown caused by the COVID-19 pandemic, but it remained the most active segment: There were 539,000 single-family homes purchased by first-time homebuyers, down 4.6% from a year ago.
First-time home buyers outperformed repeat buyers in Q2. The repeat-buyer market decreased by 19 percent from a year ago, to 793,000 units.
The number of first-time home buyers decreased by 18 percent from the previous quarter, to a seasonally adjusted annual rate of 1.86 million in Q2, the slowest pace since 2016. This slower pace in activity still yielded just over 1 million Americans becoming first-time home buyers in the first half of 2020, which was four percent higher than a year ago.
“Overall, the housing finance system was able to maintain credit availability for first-time home buyers during the COVID-19 pandemic, given the enormous challenges,” says Tian Liu, chief economist at Genworth Mortgage Insurance. “The percentage of home sales to first-time home buyers did not decrease from its pre-COVID-19 levels, and the percentage of first-time home buyers using low-down-payment mortgages increased to 83 percent, which is higher than the historical average.”
Overall, 449,000 first-time home buyers used some form of low-down-payment mortgage product to finance their home purchases in Q2. Low-down-payment conventional mortgages, enabled by the private mortgage insurance industry, helped 207,000 first-time home buyers in Q2; PMI financed 38 percent of first-time home buyers, up from 30 percent in the first quarter, and a new record for the industry.
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