TransUnion recently reported that there will be a flood of first-time homebuyers in the market over the course of the next three years.
Now, it looks like that flood may be ready to start, but the news isn’t all good.
The latest Housing Trends Report for the National Association of Home Builders, which surveys prospective homebuyers for their sentiments on buying a home, revealed that the fourth quarter of 2019 saw the fifth consecutive year-over-year drop in the share of American adults who said they plan to buy a home in the next year.
According to the report, Q4’s report showed that only 11% of adults said they want to purchase a home in the coming year, down 2% from 2018’s 13%.
But, despite this number inching down, the report holds some positive news as well.
In fact, 63% of those who said they plan to buy a house are first-time homebuyers. This is much larger than a year earlier, when 53% of prospective homebuyers were first-timers.
Broken down by age group, it’s Millennials who are most likely to make a home purchase, with 19% of the overall share. Following not too far behind is Gen Z, with 13% and Gen X, with 12%, the report said.
Those prospective buyers in the two younger generations are, for the most part, first-time buyers.
Of the Gen Z prospective buyers, 88% would be first-time buyers, while 78% of Millennials would be first-time buyers. Interestingly, 57% of Gen X buyers would be first-timers and 20% of Boomers said they would be first-timers, too.
To no surprise, only 5% of Boomers said they have plans to purchase a home. Lately, there has been an “aging in place” trend, which may provide a reason for this small percentage.
Geographically, 12% of those surveyed were prospective homebuyers in the South and West, in front of the 10% in the Northeast and 9% in the Midwest.