First-time homebuyers are on the way!
Next year will be a big one for first-time homebuyers. According to new data, up to 9.2 million first-time buyers will hit the market between 2020 and 2022.
A new era for first-time homebuyers
According to a new analysis from credit bureau TransUnion, anywhere from 8.3 million to 9.2 million first-time homebuyers will enter the housing market between 2020 and 2022. That’s up from just 6.67 million between 2013 to 2015 and 7.64 million between 2016 to 2018.<
According to Joe Mellman, senior vice president at TransUnion, the next couple of years should mark a turn-around for homebuyers.
“While we’ve recently seen a boom in refi activity, actual homeownership rates are down,” he said. “Challenges have included high home prices, sluggish wage growth, and limited housing inventory, but we may be starting to see daylight as slowing home price appreciation, low unemployment, increased wage growth, and low interest rates are helping affordability. As a result, we are optimistic that first-time homebuyers will contribute more to home ownership than at any time since the start of the Great Recession.”
Tapping first-time buyers’ minds
TransUnion also surveyed potential first-time homebuyers on their homebuying challenges.
According to the findings, most people are interested in buying a house for more privacy or the opportunity to build wealth. Only about a quarter said they want to buy a home due to getting married or having children.
What has held them back from buying so far? More than a third said they want a more steady job before buying a house. Another third said home prices are just too high.
The survey also found that many first-time buyers aren’t aware of their financing options. A whopping two-thirds of buyers said they’re unfamiliar with Fannie Mae and Freddie Mac.
“Many of our potential first-time homebuyer respondents don’t seem to be aware of the wide variety of financing options available to them,” Mellman said. “It suggests there’s a large opportunity for lenders to proactively identify consumers who are interested in becoming first-time homebuyers and then educating them on options they may not be aware of.”