The number of first-time homebuyers is on the rise. And according to NAR’s 2020 Home Buyer and Seller Generational Trends Report, more millennials became first-time homebuyers compared to any other age group category—88% of younger millennial homebuyers and 52% of older millennial homebuyers were first-time homebuyers.
Based on a report from NAR—Downpayment Expectations and Hurdles to Homeownership—the most significant obstacle for buyers in 2019 was the down payment. According to 26% of first-time buyers, saving for the down payment was the most challenging aspect in the homebuying process.
“The down payment is always difficult to save up for first-time homebuyers, especially in times of fast home price appreciation in excess of income growth. Higher standards placed on down payments will therefore hold back homeownership opportunity,” says Lawrence Yun, chief economist for NAR. “More inventory is needed to assure home prices do not outpace income growth. There will be even fewer listings during the pandemic period, but it is hoped that more listings pop out once the economy reopens,” adds Yun. “Student debt has been a lingering factor in delaying the entry time of first home purchase by younger adults. And this issue will continue in the future. On the positive side, mortgage rates are and will remain at historic lows, and that may bring to the market people with secure employment to take advantage.”
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