Largest First-Time Homebuyer Purchase Market in 20 Years

RICHMOND, Va., Dec. 16, 2020 /PRNewswire/ — Genworth Mortgage Insurance, an working section of Genworth Monetary, Inc. (NYSE: GNW), at present launched the 14^th version of its Chief Economist’s, Tian Liu, First-Time Homebuyer Market Report for the third quarter of 2020. The report aggregates all publicly accessible authorities information and proprietary mortgage business information into one digestible report. The total evaluation might be seen at https://miblog.genworth.com/first-time-homebuyer-market-report/.

Overview

First-time homebuyer exercise elevated considerably on account of low rates of interest, better affordability, and re-ignited appreciation of “residence”:

Q3’20: 700,000 single-family houses had been bought by first-time homebuyers, up 15.7% from a yr in the past
The variety of first-time homebuyers elevated by 16.3% from the second quarter to a seasonally-adjusted annual price of two.55 million in Q3, the quickest tempo on document
First-time homebuyers represented 39 % of single-family residence gross sales and 58 % of all buy mortgages

Decrease rates of interest helped ease housing affordability:

Mortgage charges for first-time homebuyers decreased from 3.36% in June to three.01% in September, the bottom rate of interest for mortgages on document
In comparison with Q2, decrease rates of interest diminished mortgage funds by 4 %, whereas greater residence costs elevated mortgage funds by three %

First-time homebuyers stay depending on low-down cost mortgages:

General, 577,000 first-time homebuyers used some type of low-down cost mortgage merchandise to finance their residence buy in Q3, or 82 % of all first-time homebuyers
PMI: Low-down cost standard mortgages, enabled by the PMI business, helped a document 285,000 first-time homebuyers in Q3, up 34 % from a yr in the past
FHA: The FHA loans program financed 195,000 first-time homebuyers through the quarter, a rise of 8 % from a yr in the past

State-by-State COVID-19 Impression:

An amazing variety of states reported the next variety of first-time homebuyers in Q3 in comparison with a yr in the past
Solely three states– New York, Pennsylvania, and Hawaii—reported fewer first-time homebuyers within the quarter in comparison with a yr in the past
For many states, the booming third quarter has erased the sharp declines within the first-time homebuyer market from Q2
Yr-to-date, 47 states and territories reported the next variety of first-time homebuyers

Repeat purchaser market additionally reported sturdy development

Development within the third quarter elevated by 17 % from a yr in the past to 1.08 million items
Within the first 9 months, repeat consumers bought a complete of two.55 million houses, down one % in comparison with the identical interval final yr
Lower pushed by the sharper slowdown within the repeat purchaser market throughout Q2

“The third quarter of 2020 was a outstanding quarter for each the housing market and the first-time homebuyer section, with probably the most first-time homebuyers buying houses in 20 years, and the best degree of residence gross sales since 2006. Though the economic system remains to be in the midst of the recession, and a lot of employees remained unemployed or unable to take part within the labor drive, there was overwhelming demand for housing and homeownership from these nonetheless capable of buy a house,” stated Tian Liu, Chief Economist, Genworth Mortgage Insurance coverage.

“The pandemic has elevated choice for homeownership as houses are serving as shelter, workplace, and classroom. Decrease rates of interest have made houses extra reasonably priced, whereas diminished spending on private providers, journey, and leisure has elevated the share of expenditure accessible for housing. A shift in housing choice amongst present owners is driving repeat purchaser actions as they search for totally different places and totally different residence options. The housing growth has resulted in greater residence costs and sparked a rise in new building of single-family houses.”

“The housing finance system continued to carry out effectively through the third quarter to make sure entry to credit score for first-time homebuyers. The COVID-19 pandemic has burdened the housing finance system in 3 ways: extra hurdles to purchase and promote houses; tighter credit score availability on account of elevated credit score threat – each precise and perceived; and lack of mortgage business capability on account of rising demand for refinancing. Credit score availability for potential first-time homebuyers might be particularly susceptible since first-time homebuyers rely closely on low-down cost mortgages for financing.”

About Genworth Mortgage Insurance coverage’s Chief Economist Report
The First-Time Homebuyer Market Report is the one financial sequence measuring the variety of residence gross sales and mortgages to first-time homebuyers protecting your entire housing market. This report gives quarterly estimates of the first-time homebuyer market because the first quarter of 1994—spanning two housing cycles and 24 years. It gives a historic perspective crucial to know at present’s first-time homebuyer market. It’s based mostly on a pattern measurement of 23.2 million first-time homebuyers from authorities experiences and business information. By capturing your entire market over a protracted interval, and offering the most recent market snapshot, this report makes the first-time homebuyer market extra seen to housing business individuals and policymakers.

For entry to the complete report and charts, go to: https://miblog.genworth.com/first-time-homebuyer-market-report/

About Genworth Mortgage Insurance coverage
Genworth Mortgage Insurance, an working section of Genworth Monetary, Inc. (NYSE: GNW), is headquartered in Raleigh, North Carolina, and operates in all 50 states and the District of Columbia. Genworth Mortgage Insurance coverage works with lenders and different companions to assist folks responsibly obtain and keep the dream of homeownership by making certain the broad availability of reasonably priced low down cost mortgage loans. Genworth has been offering mortgage insurance coverage services within the U.S. since 1981.

Disclaimer
Opinions, analyses, estimates, forecasts, and different views included in these supplies are these of Tian Liu, are based mostly on present market situations and are topic to vary with out discover, don’t essentially signify the views of Genworth or its administration, and shouldn’t be construed as indicating Genworth’s enterprise prospects or anticipated outcomes. Neither Tian Liu nor Genworth ensures that the data supplied in these supplies is correct, present, or appropriate for any explicit objective. Ahead wanting statements shouldn’t be thought-about as ensures or predictions of future occasions.

SOURCE Genworth Mortgage Insurance coverage