Genworth Mortgage Insurance says that 601,000 homes were bought by first-timers in the three months to the end of September 2017, up from 567,000 a year earlier, a 6% rise.
This was contrary to the wider housing market with repeat buyers in the quarter down 5% year-over-year (888,000) as affordability issues for movers is exacerbated by low supply. First-time buyers accounted for 40% of all homes bought.
"First-time homebuyers bought the most homes in a quarter since the third quarter of 2000, buoying the broader housing market that had slowed during this period (-1% growth compared to Q3 of 2016). The surge in first-time homebuyer demand, and the decline in overall purchases, was driven by supply-demand imbalances in today's housing market,” said Genworth chief economist Tian Liu.
The private mortgage insurance industry covered 181,000 loans to first-timers in the quarter. It was a 19% rise from a year earlier and the highest level since the second quarter of 2007.
First-time buyers accounted for 56% of all purchase mortgages financed and accounted for financing 467,000 home sales in the quarter, the highest quarterly total since Q3, 1999.
“Increased supply of low down payment mortgage products has facilitated first-time homebuyers' entry into the purchase market. During the quarter, seventy-eight percent of first-time homebuyers used a low-down payment product, an increase of five percent from a year ago,” added Liu.
Genworth says that the private mortgage insurance sector was the fastest-growing source of credit enhancement for first-time buyers while the FHA program is beginning to contract.
More market update:
An analysis of 21 million first-time homebuyers over a 24-year period shows that demand in the third quarter of 2017 was the highest since the millennium.