Millennial's reticence (or inability) to become homeowners has been widely reported, however a new report finds that first-timers returned with a vengeance last year.
The report on first-time homebuying by Genworth Mortgage Insurance shows that the fourth quarter of 2017 was the strongest for first-time buyers since 2006. During the last quarter of 2017, first-time buyers closed on 505,000 homes, and for the year, first-time purchases rose 7 percent compared to 2016. Thirty-nine percent of single-family homes sold and 55 percent of mortgages were attributed to first-time buyers.
Meanwhile, the supply of newly-constructed homes priced under $250,000, the entry-level market first-time buyers have traditionally relied on, has decreased by two percent, putting price pressure on other segments of the market.
Genworth predicts that strong demand and low supply will cause home prices to continue to rise and that the dearth of trade-up homes will lead many more people to take on remodeling and repair projects, leading them to also stay in their homes longer.
"The inflationary pressure on home prices is causing repeat buyers to consider re-investing in their own homes rather than paying a premium to buy," adds Tian Liu, chief economist at Genworth Mortgage Insurance. "This, in turn, is delaying entry into the market for many first-time homebuyers."
This article originally published at https://dc.urbanturf.com/articles/blog/first-time-homebuying-reaches-12-year-high/13600.
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