Tight affordability is not enough to curb the groundswell of first-time homebuyers dominating the mortgage market, according to new analysis from the Urban Institute.
Since 2007, first-time buyers took over as the most dominant group in the market, and in the years since, they have widened the gap more and more, as the share of repeat buyers is more than one million, whereas first-timers number nearly 1.5 million, per the Urban Institute's report. The report authors write that existing homeowners are staying in their homes longer as their home equity continues to accumulate, allowing first-timers to widen the gap further, HousingWire reports.
Unsurprisingly, the share of first-time homebuyers is even higher for FHA loans, which allow for lower down payments even with lower credit profiles. The FHA first-time homebuyer share historically made up about 80 percent of total FHA buyers, a share that dropped to about 75 percent during the recession but increased once again to about 83 percent in today’s market. The GSE share of first-time homebuyers was less, at 25 percent during the early 2000s. But this surged to 40 percent during the housing bubble. While it, too, fell during the recession, the GSE first-time homebuyer share began increasing once again in 2013 to nearly 50 percent today.