First-time homebuyers made up almost half of the new mortgages issued by Freddie Mac in the first quarter this year, according to an article from Bloomberg.
“This is a millennial-driven rise,” Freddie Mac Chief Economist Sam Khater told Bloomberg in a phone interview.
“You’ve got a strong economy that’s helping, along with the appetite of the financial market to invest in mortgages,” he added.
Despite numerous stumbling blocks on the path to homeownership, such as student debt, scarce housing inventory and soaring home prices, first-time homebuyers (the median age of the first-time homebuyer is 32, according to the National Association of Realtors) made a mad dash for mortgages in the first quarter.
According to Bloomberg, the rush for mortgages was due to fear that the situation for homebuyers will only get worse as the prices and interest rates show no signs of slowing their brisk hike. In the face of high home prices, rising multifamily rents and rising interest rates, young people are afraid that if they don’t pull the trigger on a home now, they’ll be stuck as renters indefinitely.
They might be right.