First-time buyer volume surged 15 percent in May and the first-time buyer share of home purchase loans continued to climb as well, according to a Tuesday report from the American Enterprise Institute. The agency’s First-Time Buyer Mortgage Share Index found that in May, first-time buyers accounted for 59 point 1 percent of primary owner-occupied home purchase mortgages with a government guarantee. This is up from last May’s share of 58 point 7 percent.
Also according to the report, first-time buyer share has been trending higher on a year-over-year basis, pushed up by improvements in the labor market, riskier mortgage lending, continuing low mortgage rates, and a growing number of buyers who lost a home to a foreclosure or short sale more than three years ago. The number of primary owner-occupied purchase mortgages going to first-time buyers in May totaled an estimated 137 thousand, up 15 percent from May 2015.
On Tuesday, the Urban Institute reported that 2015 saw only 620 thousand new housing units, reflecting a shortage of slightly more than 430 thousand units nationwide. As a result, the organization said, home prices and rents are going up despite historically low mortgage-interest rates and a steady economic recovery that continues to drive millennial homebuyers. The report found that starts and completions for recent single-family residential homes are below averages observed in decades before the Great Recession.