- Record-low mortgage rates improved affordability for First-time Buyers
- Home-purchase applications submitted by first-time homebuyers jumped 20% in June compared to the same month in 2019.
- Applications submitted by repeat homebuyers remained below last year’s levels, and the rate of decline slowed to 8%
The COVID-19 pandemic has impacted all sectors of the US economy (and most of the world), including the US housing market. Although purchase demand started strong for both first time home buyers and repeat homebuyers in January, and was supported by mortgage and unemployment rates that were lower than the previous year, as the pandemic spread we quickly saw the effects that impacted home selling and purchasing decisions.
The data used below is from CoreLogic Loan Application data for January through June 2020 and it compares this data to last year’s data from 2019.
2020 Purchase Applications Were Stronger for First-time Buyers Than For Repeat Buyers Compared with the Prior Year – 2019
This figure above shows the year-over-year percent change in the number of home-purchase loan applications by first-time homebuyers and repeat homebuyers relative to the same month of the prior year, using loan applications through June 30, 2020. The increase in demand in early 2020 was supported by a robust economy, a mortgage rate nearly one percentage point lower than one year earlier.
- Home-purchase loan applications rose in January 2020 compared to the same month of 2019 for both types of homebuyers, with the highest surge seen with first-time homebuyers.
- The increase in demand in early 2020 was supported by a robust economy, a mortgage rate nearly one percentage point lower than one year earlier.
- The rise in first-time buyer purchases helped to raise the homeownership rate in the first quarter to 65.3%, the highest since 2013. However, activity started to slow and was running below the pace of 2019 for repeat homebuyers from mid-February through June, likely related to warnings from health care experts of the greater risk of serious infection for the older population.
- For the first-time homebuyer, application volume dropped in April compared to the same month in 2019 reflecting the shelter-in-place orders across many areas. The market bounced back in May and June as these orders were loosened.