Top markets for affordable renovated housing inventory

Despite the rapidly deteriorating affordability, there is some hope for homebuyers in the form of renovated homes: properties that have been rehabbed into move-in ready condition after being purchased at auction.

HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

Back to the Future of Mortgage Lending

This webinar will be a discussion on understanding what’s to come in the future of mortgage lending by analyzing past trends in the industry, evolving consumer behaviors and demographics of the industry’s production capacity.

Logan Mohtashami on Omicron and pending home sales

In this episode of HousingWire Daily, Logan Mohtashami discusses how the new COVID variant, Omicron, will impact inflation and whether or not it will send mortgage rates lower.

Real Estate

First-time homebuyers are making a comeback

Housing affordability sees improvement

First-time homebuyers are making a comeback this year as they made up 39% of all buyers in the single-family housing market during the third quarter, according to the third quarter First-Time Homebuyer Market Report from Genworth Financial.

First-time homebuyers also made up 55% of all purchase mortgages. This is significantly higher than their historical average, which, since 1994, has averaged 35% of all homebuyers and 46% of new purchase borrowers.

In the third quarter this year, 591,000 single-family homes were purchased by first-time homebuyers, an increase of 1% from last year. Home sales to first-time homebuyers increased by 9% from the second quarter to a seasonally adjusted annual rate of 2.14 million units in the third quarter.

And 32 states reported more first-time homebuyers this quarter, compared to just 10 states in the second quarter.

“The first-time homebuyer market rebounded this quarter and although the rebound was modest compared with the number of first-time homebuyers a year ago, and a quarter behind the broad rebound, it was a strong rebound from the previous quarter allowing first-time homebuyers to make up some lost ground,” said Tian Liu, Genworth Mortgage Insurance Chief Economist.

This increase in first-time homebuyers is made possible by an improvement in affordability. Lower interest rates and slower growth in home prices helped improve housing affordability in the third quarter.

According to data from the Census Bureau, in the first three quarters, new home sales in the $250,000 to $300,000 price range increased by 31% from a year ago, more than the increase in all other price segments combined.

And what’s more, first-time homebuyers may even begin driving the refinance wave. Between the 2017 and the first quarter of 2019, about 4.53 million first-time homebuyers bought homes, and many now have their first opportunities to refinance this year.

The significant decrease in interest rates and size of the first-time homebuyer market from the past two years created the biggest opportunity for first-time homebuyers to refinance.

“Falling mortgage rates and the large increase in supply in the affordable segment is helping to stabilize home price growth and improve affordability – this has been the most positive trend this year and has benefited the entire housing industry as well as homebuyers,” Liu said.

“Additionally, the significant decrease in interest rates and size of the first-time homebuyer market over the past two years created one of the largest opportunities for first-time homebuyers to refinance,” Liu added.

“Finally, low down payment mortgages remain at the core of mortgage financing for first-time homebuyers, and continue to support the shift away from government loan programs toward conventional loans with low down payments,” Liu concluded.

Most Popular Articles

FHFA: Government to back mortgages up to $970,800 in 2022

The FHFA today announced the baseline conforming loan limit for 2022 will be $647,200, an increase of 18%. In high-cost areas, the new ceiling loan limit will be $970,800.

Nov 30, 2021 By

Latest Articles

What Omicron, bond market and jobs mean for housing

We often have two to three job reports per year that miss estimates badly. However, remember that we have over 10 million job openings.

Dec 03, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please