While the National Association of Homebuilder’s latest Housing Trends Report found the share of adults looking to buy a home over the next year fell to 11% in Q4 2019, the number of prospective first-time buyers rose to 63%.
The share of first-time buyers rose from 53% in Q4 2018. Prospective adults looking to buy a home fell from 13% during the same quarter last year.
This drop marks the fifth-consecutive year-over-year decline in the share of prospective adults looking to buy a home. The NAHB said this trend is likely spurred by low levels of housing inventory.
The share of prospective homebuyers for adults has consistently fallen since Q4 2017 when the share was 24%.
The most recent figures are the second-consecutive quarter of increases for first-time buyers and is an increase from Q4 2018’s 53%.
Millennials are most likely to purchase a home within the next year at 19%. The millennial generation was followed by Gen Z (13%) and Gen X (12%). Just 5% of Baby Boomers are planning to purchase a home.
While millennials are more likely to buy a home, it is Gen Z consumers who are most likely to first-time buyers at 88%. Millennials were close behind at 78%. The share of first-time buyers drops significantly for Gen Z buyers 57%) and Baby Boomers (20%).
The NAHB states that more than 60% of prospective buyers in every region are buying a home for the first time.
The Northeast led the nation with 65% of first-time buyers planning to buy a home. The South region followed with 64%, the West had 62%, and the Midwest had 61%.
The South and the West regions led the nation in potential home sales for adults at 12%. Ten percent of adults plan to buy a home in the Northeast and 9% in the Midwest.
Forty-percent of first-time buyers are looking to buy an existing, while 19% prefer a newly-built home. The remaining 41% would purchase both options.