First-day homeownership spikes: Half the home buyers are making their very first get
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SEATTLE , /PRNewswire/ — Half of all home buyers are purchasing their first home, the highest share that Zillow has ever recorded. Zillow’s 2023 User Homes Style Statement finds that first-time buyers now make up 50% of all home buyers, up from 45% last year and a meaningful jump from 37% in 2021. The share of first-time buyers likely hasn’t been this high since around 2010, when there was a first-time home buyer tax credit.
First-time buyers are making gains relative to repeat buyers. Zillow research finds a vast majority of homeowners with mortgages have locked in a rate below 5%, and are almost half as likely to consider moving. It’s true that first-time buyers make up a larger piece of a smaller pie, as household transformation and inventory shrink. However, this significant rise in the share of first-time buyers helps explain what’s driving demand and staying upward tension for the costs in a market with mortgage rates surpassing 7%.
“High mortgage rates and a shortage of inventory is keeping would-be repeat buyers in their current homes,” said Zillow senior population scientist Manny Garcia . “A greater relative share of first-time buyers is filling the gap, and they’re competing against each other for the limited number of affordable starter belongings on the market.”
Affordability is the greatest hurdle for first-time home buyers. It now takes almost twelve ages for a typical first-time buyer to save up for a down payment, compared to nine years prior to the pandemic. Meanwhile, the typical monthly home payment has more than doubled in that time. Yet the growing share of first-time buyers suggests many are getting creative to make homeownership a reality.
