The Truth About First Time Homebuyers
First time homebuyers make up the majority of loan applicants nationally this spring. From the April 18th issue of FREDDIE MAC OUTLOOK “…Purchase applications for 30-year fixed-rate purchase mortgages are up 8% from the same period last year, even as the median mortgage rate and median sales price have increased. First-time homebuyers continue to carry demand so far this year as they make up almost 6 out of 10 purchase applications.”
Who are first time homebuyers?
We looked for the answer from the National Association of Realtors (NAR). The NAR compiles data from an annual profile of buyers and sellers to share insights with the real estate community. The 2024 Home Buyers and Sellers Generational Report shows Millennial-aged buyers make up the largest share of home buyers at 38%.
34 to 43 years (older millennials) make up 21%; 44% of these were first time homebuyers. 25 to 33 years (younger millennials) make up 17%; 75% of these were first time homebuyers. These stats are relative to previously used or “resale” homes and new construction. Of those buyers choosing new construction over used, the primary reasons for doing so were:
-Avoid renovations or problems with plumbing or electricity
-Ability to choose and customize design features
-Amenities of new home construction communities
Should I buy now?
If you’re in the market to buy a home, you’re watching home prices and interest rates. It’s what you do. The question that’s been present for the last few years is always, “Should I buy now, or wait?” Back to Freddie Mac’s report: “While housing demand is solid due to a large share of Millennial first-time homebuyers looking to buy homes, they are challenged by high mortgage rates and a lack of homes available for sale. We expect these challenges to persist in 2024 mainly in the absence of significant rate cuts, which will keep the rate-lock effect in place and keep total home sales volume below five million in 2024. Due to solid housing demand but lean inventory, we expect upward home price pressure and forecast home prices to increase 0.5% in 2024 and in 2025.”
Other statistics from NAR show that First Time Homebuyers finance the majority of the home purchase. Many take advantage of first time homebuyer offerings with low or no down payment and other grant programs. We recommend directing lending questions to our partners at Coastal Loans. Their Loan Originators go into the trenches to help homebuyers find the right financing program.
Why New Construction
While the number of resale homes sold still outpaces the sale of new construction homes, we find the reasons people choose new home construction compelling. In addition to the top three reasons cited above, homebuyers also listed energy efficiency/green building and smart home features on their “why buy new” list. As homebuilders, we like to remind buyers that new construction comes with a home warranty. Holiday Builders offers a two-year warranty on Cornerstone collection floorplans and a one-year warranty on Value and Inspire collection plans. And yet another BIG plus these days is lower homeowners insurance costs on new construction.
What is the truth about First time homebuyers? First Time Homebuyers make up the significant portion of today’s homebuyers who apply for loans. These buyers mostly fall into the Millennial category. Millennials finance the majority of their home purchase. And when they choose new home construction, they do so because they don’t want to make repairs, they like to personalize their home with design options and they like amenities associated with new communities. If you’re interested in homebuying data, NAR’s report is downloadable. To learn more about buildable floorplans, move in ready homes, locations and pricing, visit HolidayBuilders.com.
Tags: first-time homebuyers, millennials, new home constrution
