The number of first-time single-family homebuyers has hit a peak not seen since 2005 and is expected to spur the origination of more mortgages with higher loan-to-value ratios.
"I think we'll see continued growth and strength in the first-time homebuyer market and first-time homebuyers rely on low down payments," said Tian Liu, chief economist at Genworth Mortgage Insurance.
First-time buyers represented 424,000 or 38% of single-family home sales in the first quarter, according to a new study by Genworth. Last year, first-time homebuyers accounted for 37% of home sales, up from 34% in 2015.
Growth was slower quarter-to-quarter than it was year-to-year, which could reflect the first-quarter's typical seasonal weakness. First-time homebuyer sales were up 11% over the first quarter of 2016, and were up 15% over 2015.
The recent increase in first-time homebuyer sales may stem from pent-up demand. There were 3 million fewer homebuyers in the last 10 years than there have been historically due to the housing crisis that followed a bubble in the mid-2000s.
The statistics are based on estimates derived from 20 million records that go back to 1994. These records represent half the market for the entire period and bulk of the market in the last several years.