Since unexpectedly shrinking from a 40 percent to 30-percent share of home sales three years ago, the lowest level since 1987, first-time buyers have baffled the experts and raised questions about why Millennials are becoming homeowners at a slower rate than previous generations.
This spring, as the clock ticks down on record low-interest rates and incomes slowly improve, first-timers are showing signs of life.
NAR’s April Realtor Confidence Index reports first-timers bought 32 percent of the 5.45 million existing homes sold in April. Sales are now up 6.0 percent from April 2015 and from an upwardly revised 5.36 million in March.
The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey had even better news. First-time homebuyers accounted for 38.9% of home purchases in April, based on a three-month moving average. That was up from a 38.1% share the previous month and a 37.2% share in April 2015.
“Demand from first-time homebuyers is surging in springtime,” said Tom Popik, research director for Campbell Surveys.
As of the end of April, the Campbell Surveys market share for first-time homebuyers had increased for five consecutive months, taking share from both current homeowners and investors. Current homeowners accounted for 45.7% of home purchases in April and investors had a 15.4% share.
Traffic from first-time homebuyers has been stronger than traffic from the other homebuyer types for much of the past year, but first-time homebuyers face a number of impediments to completing home purchases.
Move-in ready real estate owned properties targeted by some first-time homebuyers received an average of 2.4 offers in April, and non-distressed properties received an average of 2.2 offers during the month. Many real estate agents reported that desirable properties often receive 10 or more offers.
The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey involves approximately 2,000 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.