RICHMOND, Va., Aug. 21, 2019 /PRNewswire/ -- Genworth Mortgage Insurance, an operating segment of Genworth Financial, Inc. (NYSE: GNW), today released the 10th edition of the First-Time Homebuyer Market Report, authored by its Chief Economist, Tian Liu, for the second quarter of 2019. The report aggregates all publicly available government data and proprietary mortgage industry data into one digestible report. The full analysis and chart pack can be viewed at https://miblog.genworth.com/first-time-homebuyer-market-report/.
- First-time Homebuyer Share Decreased: For the first time, the year-over-year growth rate in home sales to first-time homebuyers underperformed the overall single-family housing market
- However, first-time homebuyers represented 36 percent of all buyers in the single-family housing market and 55 percent of new purchase borrowers
- Single-family home purchases decreased:
- 2Q'19: decreased by four percent from Q1 to a seasonally adjusted annual rate of 1.94 million
- 559,000 single-family homes were purchased – a four percent decline from 2Q'18
- Diverging Trends Across States: The slowdown spread to 43 states compared to 39 states in 1Q'19; Nine states reported increased first-time homebuyer activity
- Housing affordability improved:
- The past three years saw a trend towards declining affordability. That trend reversed in Q1 driven by a slowdown in home price growth and falling interest rates. Housing affordability continued to improve in Q2.
- The interest rate for first-time homebuyers decreased by 39 basis points to 4.51 percent, and is 50 basis points higher than the 30-year mortgage rate as reported by the Freddie Mac Primary Mortgage Market Survey®.
- Low down payments still preferred by first-time homebuyers:
- Overall, 424,000 first-time homebuyers used some form of low down payment mortgage products to finance their home purchase in Q2
- PMI: Low down payment conventional mortgages, enabled by the private mortgage insurance industry, helped 201,000 first-time homebuyers in Q2 – more than any other product; up six percent compared to a year ago
"The contraction in the number of first-time homebuyers came as a surprise because the overall housing market has seen a moderate rebound compared to Q4'18," said Tian Liu, Chief Economist, Genworth Mortgage Insurance. "Housing affordability continued to improve, driven mainly by falling mortgage rates, and also was supported by falling home price growth and faster wage growth. While falling mortgage rates are the result of higher economic uncertainties, and could negatively affect buyer confidence, they are still a net positive for the housing market in Q2. Low down payment mortgages remain at the core of mortgage financing for first-time homebuyers, and we're continuing to watch the shift away from government loan programs toward conventional loans with low down payments."
About Genworth's First-Time Homebuyer Market Report
The First-Time Homebuyer Market Report is the only economic series measuring the number of home sales and mortgages to first-time homebuyers covering the entire housing market. This report provides quarterly estimates of the first-time homebuyer market since the first quarter of 1994—spanning two housing cycles and 24 years. It provides a historical perspective necessary to understand today's first-time homebuyer market. It is based on a sample size of 23.2 million first-time homebuyers from government reports and industry data. By capturing the entire market over a long period, and providing the latest market snapshot, this report makes the first-time homebuyer market more visible to housing industry participants and policymakers.
For access to the full report and charts, visit: https://miblog.genworth.com/first-time-homebuyer-market-report/
About Genworth Mortgage Insurance
Genworth Mortgage Insurance, an operating segment of Genworth Financial, Inc. (NYSE: GNW), is headquartered in Raleigh, North Carolina, and operates in all 50 states and the District of Columbia. Genworth Mortgage Insurance works with lenders and other partners to help people responsibly achieve and maintain the dream of homeownership by ensuring the broad availability of affordable low down payment mortgage loans. Genworth has been providing mortgage insurance products and services in the U.S. since 1981.
Opinions, analyses, estimates, forecasts, and other views included in these materials are those of Tian Liu, are based on current market conditions and are subject to change without notice, do not necessarily represent the views of Genworth or its management, and should not be construed as indicating Genworth's business prospects or expected results. Neither Tian Liu nor Genworth guarantees that the information provided in these materials is accurate, current, or suitable for any particular purpose. Forward looking statements should not be considered as guarantees or predictions of future events.