Homebuying market remains calm amid economic headwinds

Since 2014, first-time homebuyers have been a crucial part of the housing market. In fact, we discovered that this segment has grown by over 40% since 2014. Still, more than 2.7 million potential buyers are missing from this group, offering lenders a vast opportunity in the housing market. Additionally, younger buyers are entering into this market despite limited affordable home inventory and rising interest rates. First-time buyers entered the market in the first half of this year at a faster pace than any other year since 2005.

Since 2014, the market has experienced an imbalance between supply and demand, which has slowed growth in the housing market and related industries. The market is telling us that homebuyers are sensitive to the large price increases over a short period of time and rising interest rates. So, what is this doing to the market?

In 2017, 3.4 million single-family homes were sold to repeat buyers. This number has been largely flat since 2014. Conversely, first-time homebuyers have grown by 577,000, or 39%, during the same period. These buyers have accounted for 80% of the increase in sales volume over the last four years. While these numbers look strong, there are significant headwinds, including:


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