A Study of First-Time Homebuyers

Abstract

This study estimates annual first-time homebuyer shares using 20 years of loan-level mortgage data from Fannie Mae, Freddie Mac and FHA. These shares are consistent with popular estimates from various survey data. The first-time homebuyer shares in the U.S. during the last 20 years were approximately 40 percent with a noticeable upward trend from 2007 to 2010 and a downward trend subsequently. This study also compares mortgage and borrower characteristics of first-time and repeat homebuyers. First-time homebuyers are distinct from repeat homebuyers. First-time homebuyers buy less expensive properties with smaller loans and have slightly higher preference for 30-year fixed-rate mortgages. They are also younger in age, have lower income and credit score, and higher loan-to-value and debt-to-income ratios.