RICHMOND, Va., Dec. 10, 2019 /PRNewswire/ -- Genworth Mortgage
Insurance, an operating segment of Genworth Financial, Inc. (NYSE:
GNW), today released the 11th edition of the First-Time
Homebuyer Market Report, authored by its Chief Economist,
Tian Liu, for the third quarter of
2019. The report aggregates all publicly available government data
and proprietary mortgage industry data into one digestible report.
The full analysis can be viewed at
https://miblog.genworth.com/first-time-homebuyer-market-report/.
Overview
- First-time homebuyers continue to play a large role in the
housing market:
-
- First-time homebuyers represented 39 percent of all
buyers in the single-family housing market, and 55 percent of all
purchase mortgages
- First-time homebuyers represent a larger part of the housing
market today compared with the historical average. Since 1994, they
have represented an average of 35 percent of all homebuyers, and 46
percent of new purchase borrowers.
- First-time homebuyer market rebounded:
-
- 3Q'19: 591,000 single-family homes were purchased by
first-time homebuyers, a one percent increase from a year ago
- Home sales to first-time homebuyers increased by nine percent
from 2Q to a seasonally adjusted annual rate of 2.14 million units
in 3Q'19 – a sharp turnaround in first-time homebuyer activity
- Widespread Growth Across States: 32 states reported more
first-time homebuyers compared with 10 states in 2Q'19
- Sales in the repeat buyer market saw fast growth:
-
- The number of repeat homebuyers grew by seven percent from a
year ago to 936,000, one of the fastest-growing quarters since
2012-13
- Housing affordability improved:
-
- Lower interest rates and slower growth in home prices helped
improve housing affordability and drive the rebound in the
first-time homebuyer market
- As reported by the Freddie Mac Primary Mortgage Market Survey®,
the 30-year conventional mortgage rate decreased by 35 basis points
over the last quarter to 3.66 percent, while the interest rate for
first-time homebuyers decreased by 41 basis points to 4.11 percent,
the lowest level since Q4'16
- According to data from the Census Bureau, in the first three
quarters, new home sales in the $250,000 – $300,000
price range increased by 31 percent from a year ago, more than the
increase in all other price segments combined
- Significant Opportunity for First-Time Homebuyers to Drive
Refinance Wave:
-
- 4.53 million first-time homebuyers bought homes between 2017
and 1Q'19, and many now have their first opportunities to refinance
this year. The significant decrease in interest rates and size of
the first-time homebuyer market from the past two years created the
biggest opportunity for first-time homebuyers to refinance.
- Low down payments still preferred by first-time
homebuyers:
-
- Overall, 473,000 first-time homebuyers used some form of low
down payment mortgage products to finance their home purchase in
Q3, or 80 percent of all first-time homebuyers
- PMI: Low down payment conventional mortgages,
enabled by the private mortgage insurance industry, helped 209,000
first-time homebuyers in Q3 – more than any other product; up four
percent compared to a year ago and accounting for 35 percent of all
first-time homebuyer purchases
"The first-time homebuyer market rebounded this quarter and
although the rebound was modest compared with the number of
first-time homebuyers a year ago, and a quarter behind the broad
rebound, it was a strong rebound from the previous quarter allowing
first-time homebuyers to make up some lost ground," said
Tian Liu, Chief Economist, Genworth
Mortgage Insurance.
"Sales in the repeat buyer market saw its fastest growth since
the early years in the current housing cycle and if sustained, this
could suggest a shift in the growth drivers in the housing market
from first-time buyers to repeat buyers. More importantly, it may
suggest a turnaround in homeowner mobility, which has been
depressed this cycle. Falling mortgage rates and the large increase
in supply in the affordable segment is helping to stabilize home
price growth and improve affordability – this has been the most
positive trend this year and has benefited the entire housing
industry as well as homebuyers. Additionally, the significant
decrease in interest rates and size of the first-time homebuyer
market over the past two years created one of the largest
opportunities for first-time homebuyers to refinance. Finally, low
down payment mortgages remain at the core of mortgage financing for
first-time homebuyers, and continue to support the shift away from
government loan programs toward conventional loans with low down
payments."
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 and charts, visit:
https://miblog.genworth.com/first-time-homebuyer-market-report/
About Genworth Mortgage Insurance
Genworth Mortgage
Insurance, an operating segment of Genworth Financial, Inc. (NYSE:
GNW), is headquartered in Raleigh, North
Carolina, and operates in all 50 states and the District of Columbia. Genworth Mortgage
Insurance works with lenders and other partners to help people
responsibly achieve and maintain the dream of homeownership by
ensuring the broad availability of affordable low down payment
mortgage loans. Genworth has been providing mortgage insurance
products and services in the U.S. since 1981.
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.
View original
content:http://www.prnewswire.com/news-releases/genworth-mortgage-insurances-economist-report-third-quarter-modest-rebound-in-first-time-homebuyer-market-largest-refinance-opportunity-for-first-time-homebuyers-300971646.html
SOURCE Genworth Mortgage Insurance