RICHMOND, Va., Feb. 28, 2019 /PRNewswire/ -- Genworth
Mortgage Insurance, an operating segment of Genworth Financial,
Inc. (NYSE: GNW), today released the eighth edition of the
First-Time Homebuyer Market Report from its Chief Economist,
Tian Liu, detailing data findings
from the fourth quarter of 2018 and the full year. 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
here.
4Q'18 Overview
- Fewer first-time homebuyers amid housing slowdown:
480,000 single-family homes were purchased—a decline of three
percent from a year ago, compared to a one percent increase in Q3;
The first-time homebuyer market was more resilient during the
housing slowdown compared to repeat buyers, which saw a decline of
seven percent
- Larger Share: First-time homebuyers accounted for 39
percent of single-family homes sold in 2018, up from 31 percent in
2014; 56 percent of new purchase loans in 2018, up from 52 percent
in 2014; Highest level of first-time homebuyer mix in the housing
market since 2000
- Diverging Trends Across States Continue: The slowdown in
Q4 is reflected by a large increase of states reporting lower
numbers of homebuyers: 19 states in Q3 compared to 35 in Q4
- Affordability Continued to Deteriorate: Housing
affordability deteriorated by 17 percent in Q4 from a year ago, due
to rising interest rates and higher home values
- Slowdown Intensified: Homebuyers have reacted to the
worsening affordability by putting off buying and looking for
lower-priced homes, which resulted in lower prices for first-time
homebuyers in Q4. This point is illustrated by lower prices paid by
about 80 percent of all homebuyers and 70 percent of first-time
homebuyers compared to a year ago. The median price paid by
first-time homebuyers declined by two percent year-over-year to
$233,600.
Full Year '18 Overview
- Historically Strong First-Time Homebuyer Market: 2.07
million first-time homebuyers purchased single-family homes in
2018, up less than one percent from 2017, and the most since
2006
- A First-Time Homebuyer Cycle: First-time homebuyers
accounted for 99 percent of the growth in home sales between 2014
and 2018. They are reshaping the demographics by moving from states
such as California, Illinois, Massachusetts, Michigan, Louisiana, New
York and Texas, and into
states such as Arizona,
Florida, Georgia, Delaware, Idaho and Nevada
- Low Down Payment Mortgages Still Preferred: Financed
1.67 million (or 80 percent) first-time homebuyers in 2018, an
increase of 50 percent since 2014
- Private Mortgage Insurance (PMI) Most-Sold Product:
682,000 homebuyers used conventional mortgages with PMI to finance
their first home purchase in 2018, 53,000 more than the FHA,
historically the largest first-time homebuyer product; PMI industry
now serves twice as many first-time homebuyers compared to
2014
Comments from Tian Liu, Chief
Economist, Genworth Mortgage Insurance
"The first-time homebuyer market once again outperformed the
broader housing market, recording its best purchase year since 2006
and regaining its pre-Housing Crisis level. At the same time,
first-time homebuyers are not immune to declining affordability, as
their number declined nationally and in 35 states in Q4.
First-time homebuyers responded to declining affordability by
taking a wait-and-see approach and opportunistically looking for
lower-priced properties.
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 private mortgage insurance
industry now serves twice as many first-time homebuyers
compared to 2014.
Looking ahead, some first-time homebuyers may be in fear of
overpaying during the slowdown which could prolong the slowdown.
However, the improved housing affordability in the past two months,
if sustained, may boost momentum by the 2019 spring selling season,
which could, in turn, lead to better housing data and lift
confidence in the market. In the longer term, the current
slowdown should serve to remind the housing industry and
policymakers of the importance of housing affordability. The
housing industry should also take note of the resilience of the
first-time homebuyer market in the downturn and offer more products
and services to meet their needs."
About Genworth Economist'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 23.7 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.
To access the full report, visit:
https://miblog.genworth.com/first-time-homebuyer-market-report-02-19/.
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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new postings. Enrollment information is found under the "Investors"
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publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth
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 Mortgage Insurance