RICHMOND, Va., March 17, 2020 /PRNewswire/ -- Genworth
Mortgage Insurance, an operating segment of Genworth Financial,
Inc. (NYSE: GNW), today released the 12th edition of the
First-Time Homebuyer Market Report, authored by its Chief
Economist, Tian Liu, for the fourth
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/.
4Q and 2019 Full Year Overview
- First-time homebuyer market activity strong in Q4:
517,000 single-family homes were purchased––up six percent from a
year ago; First-time homebuyers reached 2.18 million
seasonally-adjusted annual rate in Q4, their fastest pace since
2006
- First-time homebuyer market in the middle of a
boom: A stronger second half pushed the first-time
homebuyer market to a strong full year result of 2.09
million. For the third consecutive year, the number of
first-time homebuyers exceeded 2 million, unprecedented in the past
26 years.
- The most important customer segment for the housing
industry: In 2019, 38 percent of all homebuyers and 56
percent of purchase borrowers are first-time homebuyers
- First-time homebuyer demographics maturing: The aging of
the Millennial population implies that the increase in first-time
homebuyers over the age of 30 will likely lead to an overall
increase in the number of first-time homebuyers in the 25-44 age
group in the order of 580,000 first-time homebuyers over five
years
- First-time homebuyer growth turning headwind into tailwind
for the second-time homebuyer market: The pool of potential
second-time homebuyers increased for the first-time since 2008 to
8.3 million in 2019 and will grow by over three million in five
years
- Strong first-time homebuyer trends across states: States
with fast job growth reported first-time homebuyer growth rates of
44 percent between 2014 and 2019, compared to the 37 percent growth
rate for states with slow job growth
- Improving housing affordability providing a better
environment for first-time homebuyers: In addition to
lower mortgage rates, housing affordability also improved as
homebuilders expanded building activity by 16 percent in the
$200,000 to $400,000 price range, leading to the fastest
growth in new homes sold since 2016
- Low-down payment mortgages essential for first-time
homebuyers: Financed 1.66 million (80 percent) first-time
homebuyers in 2019, up one percent from 2018; Second biggest year
for the low-down payment mortgage market in history
- Private Mortgage Insurance (PMI) most-sold product:
720,000 first-time homebuyers used conventional mortgages with PMI
to finance their first home purchase in 2019, up five percent from
a year ago
Comments from Tian Liu, Chief
Economist, Genworth Mortgage Insurance
"The housing market
is in the middle of a multi-year boom in the first-time homebuyer
market. The market has exceeded 2 million first-time homebuyers
each year for the past three years, which is unprecedented in the
past 26 years. In part, this represents a long overdue rebound from
the trough earlier in the decade."
"The first-time homebuyer market offers important insights into
the housing market. With 38 percent of home sales and 56 percent of
purchase loans in 2019, it is a market too big to ignore. I see the
trend toward more affordable homes by homebuilders and a
historically large PMI market as two results of the boom in the
first-time homebuyer market."
"Another feature of the housing market from the past five years
is a lack of homeowner mobility, which has resulted in a flat
repeat-buyer market in the middle of generally favorable economic
conditions. The trend in the first-time homebuyer market offers an
explanation and a prediction. A prolonged depression in the
first-time homebuyer market between 2007 and 2015 led to a sharp
decrease in the pool of potential second-time homebuyers, resulting
in lower homeowner mobility. But the strong growth in the last few
years predicts that the repeat-buyer market and mobility should
recover over the next five years."
"The tremendous growth in the first-time homebuyer market over
the past five years shows that first-time homebuyers have been busy
building careers, and places with abundant job opportunities are
very attractive to first-time homebuyers. But the sheer size of the
market and the delay in expanding housing supply means that a
first-time homebuyer's paradise, a place with abundant job
opportunity and highly-affordable housing, is difficult to find.
Markets with abundant job opportunities and acute affordability
challenges also are markets with the most opportunities to expand
supply and policy intervention. In the meantime, first-time
homebuyers may have to compromise between job opportunities and
housing affordability."
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.
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SOURCE Genworth Mortgage Insurance