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First Time Homebuyers Are Dominating the Market – Here’s Why

First-time homebuyers may be facing rising affordability issues, but they are still outpacing the share of repeat buyers in the housing market, according to the latest report from the Urban Institute.

This is nothing new, as first-time homebuyers have dominated the mortgage market for the past 10 years, but the latest data shows that gap actually continues to grow, according to the report.

The chart below shows repeat buyers dominated the market before the housing crisis, however, after 2007, that all changed. And since about 2014, that gap has continued to grow.

This begs the question – Why has the share of first-time homebuyers surged since the housing crisis?

Partly, it’s the better economy. But a big chunk of the increase is driven by the pullback of repeat buyers. From 2001 to 2007, repeat buyers purchased from 1.4 to 1.8 million homes per year, but that dropped to just over 1 million today.

The Urban Institute explained that falling home prices after the recession prevented many homeowners from accumulating equity in their homes. But even as home prices continue to rise and homeowners are seeing a rebound in equity, the report shows repeat buyers will still not return to their historic levels.

While homeowners may have more equity, they are not likely to want to give up their low mortgage rates they locked in during the recession.

And now, the Urban Institute explained that homeowners hanging on to their homes and not moving up, combined with the lack of new home construction, will cause inventory to continue to tighten and home prices to increase for starter homes.


Give the Robinson Team a call. We’d be honored to assist you in selling your home, as well as finding your next one. Remember, at any price in any neighborhood, The Robinson Team sells homes!

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