RICHMOND, Va., Dec. 12, 2018 /PRNewswire/ -- Genworth
Mortgage Insurance, an operating segment of Genworth Financial,
Inc. (NYSE: GNW), today released the First-Time Homebuyer Market
Report from its Chief Economist, Tian
Liu, for the third quarter of 2018. The report aggregates
all publicly available government data and proprietary mortgage
industry data into one dataset. The below highlights are followed
by Liu's analysis, and the full report can be downloaded at
https://miblog.genworth.com/first-time-homebuyer-market-report-12-18/.
Overview
- Single-family home purchases increase
-
- 3Q'18: 582,000 single-family homes were purchased – a
one percent year-over-year increase
- 9M'18: 1,580,000 single-family homes were purchased
– the most during the first nine months of a year since 2005
- Larger Share: First-time homebuyers accounted for 40
percent of single-family homes sold and 55 percent of purchase
mortgages originated, both higher than a year ago
- Diverging Trends Across States: Unlike the 2014-17
period when almost all states reported more first-time homebuyer
activities, only two-thirds of states reported growth in
Q3
- Lower housing affordability: Monthly mortgage payments
for first-time homebuyers increased by 15 percent year-over-year
from higher interest rates (up eight percent more) and higher home
prices (up over six percent)
- Homebuyers Favoring Lower-Priced Homes: Prices for the
most expensive 40 percent of homes bought by first-time homebuyers
declined for the first-time since 2013-14
- Sales of Affordable New Homes Grew: New homes priced
between $200,000 and $300,000 were one of the few price segments to
show year-over-year growth, up by 15 percent, while demand for
homes priced between $300,000 and
$750,000 decreased by five
percent
- PMI Most-Sold Product: 202,000 homebuyers used
conventional mortgages with private mortgage insurance to finance
their first home purchase, a 17 percent year-over-year increase.
For two consecutive quarters conventional loans with mortgage
insurance were the single-largest source of credit for first-time
homebuyers
- Low Down Payments Still Preferred: 463,000 (80 percent)
of homebuyers used low down payment mortgages to finance their
first home purchase
- Young Homeowner Demand Grows: Homeownership rates for
households under 35 years of age increased by 1.2 percent during
the third quarter
Comments from Tian Liu, Chief
Economist, Genworth Mortgage Insurance
"The first-time homebuyer market report brings additional
state-level and price-point data into focus this quarter. The
goal remains helping the housing industry and policymakers
understand first-time homebuyers, which accounted for 40 percent of
single-family home sales and 55 percent of purchase loans. The
focus this quarter is on first-time homebuyers' response to rising
interest rates and rising home prices, which has reduced
affordability and contributed to the slowdown in the housing
market.
The first-time homebuyer market once again outperformed the
broader market, recording their best first nine months in 13 years
and showing that the current housing cycle's fundamentals remain
strong despite a broader slowdown in activity.
At the same time, first-time homebuyers are not immune to
declining affordability, and the market has declined in 19
states. First-time homebuyers adjusted to declining
affordability by buying cheaper homes. In previous quarters,
that showed up as stronger home price gains at the lower end.
This quarter, instead, home prices declined at the higher end – for
the first time since the 2013-14 "Taper-Tantrum" event. This bears
monitoring since lower prices and weaker demand could cascade into
the first-time homebuyer market at the lower end.
A more resilient first-time homebuyer market and a move by
homebuyers toward lower-priced homes also affected the new
construction market. New homes between $200,000 and $300,000, where there are more first-time buyers,
saw a 15 percent increase, while those priced between $300,000 and $750,000, where there are more repeat buyers, saw
declines ranging from 3 –12 percent.
Low down payment mortgages, and conventional loans with private
mortgage insurance in particular, play a very important role in
supporting first-time homebuyers, and even more so in a market with
declining affordability. The success of the private mortgage
insurance industry, which for the second consecutive quarter
financed the most first-time homebuyers, demonstrates the large
business opportunities it offers to the housing industry."
About Genworth's First-Time Homebuyer Market Report
The First-Time Homebuyer Market Report is the only economic series
measuring the number of home sales and mortgages to first-time
homebuyers covering the entire housing market. This report provides
quarterly estimates of the first-time homebuyer market since the
first quarter of 1994—spanning two housing cycles and 24 years. It
provides a historical perspective necessary to understand today's
first-time homebuyer market. It is based on a sample size of 23.2
million first-time homebuyers from government reports and industry
data. By capturing the entire market over a long period, and
providing the latest market snapshot, this report makes the
first-time homebuyer market more visible to housing industry
participants and policymakers.
For access to the full report, visit:
https://miblog.genworth.com/first-time-homebuyer-market-report-12-18/
About Genworth Financial
Genworth Financial, Inc.
(NYSE: GNW) is a Fortune 500 insurance holding company committed to
helping families achieve the dream of homeownership and address the
financial challenges of aging through its leadership positions in
mortgage insurance and long term care insurance. Headquartered
in Richmond, Virginia, Genworth
traces its roots back to 1871 and became a public company in
2004. For more information, visit genworth.com.
From time to time, Genworth releases important information via
postings on its corporate website. Accordingly, investors and other
interested parties are encouraged to enroll to receive automatic
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Mortgage Insurance Australia Limited, separately release financial
and other information about their operations. This information can
be found at http://genworth.ca and
http://www.genworth.com.au.
Disclaimer
Opinions, analyses, estimates, forecasts,
and other views included in these materials are those of
Tian Liu, are based on current
market conditions and are subject to change without notice, do not
necessarily represent the views of Genworth or its management, and
should not be construed as indicating Genworth's business prospects
or expected results. Neither Tian
Liu nor Genworth guarantees that the information provided in
these materials is accurate, current, or suitable for any
particular purpose. Forward looking statements should not be
considered as guarantees or predictions of future events.
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SOURCE Genworth Financial, Inc.