More First-Time Buyers Coming Off the Sidelines MABA MassachusettsRealEstate FirstTimeHomeBuyers MaByerAgent

 It’s no secret that buying a home has been exceedingly difficult in the past few years due to a number of affordability factors. From rates bordering the seven percent range, to record high home prices, many home buyers are sitting on the sidelines waiting for a seismic change to hit the U.S. housing market.

 New data from LendingTree shows that among those active in the market last year, first-time buyers received a larger share of offers than those who already own. Data shows that three in five buyers (sixty point nine percent) offers to users on LendingTree’s platform in 2024 went to first-time buyers. And while this figure may seem high, it’s actually down from 65.3% that LendingTree reported in 2023.

 Of the nation’s markets, New York, California, and New Jersey saw the highest share of mortgage offers going to first-time buyers. In New York, seventy six point one percent of offers went to first-time buyers, down from seventy seven point three percent in 2023, but still the highest share in the nation. California (seventy percent) and New Jersey (sixty nine point two percent) followed, also keeping their same rankings as in 2023.

 In Alaska, the lowest share of mortgage offers go to first-time buyers. At forty seven point one percent, Alaska was the only state below fifty percent a significant drop from fifty four point four percent in 2023. Alaska was joined in the bottom three by New Mexico (fifty one point two percent) and Arkansas (fifty two point four peercent).

 When profiling this type of home buyer, first-time buyers tend to have lower credit scores, lower down payments, and mortgage amounts than repeat buyers. Credit scores for first-time buyers are an average of thirty two points lower than those of repeat buyers, averaging seven hundred for first-time buyers versus seven hundred and thirty two for repeat buyers. Down payments were an average of $63,449 lower $47,654 versus $111,103 and loan amounts are an average of $56,131 smaller $321,818 versus $377,949.

 Millennials received nearly half of the first-time buyer offers, as forty nine point seven percent of mortgage offers that went to first-time buyers in 2024 went to millennials ages 28 to 43, ahead of Generation Z members ages 18 to 27 at twenty nine percent. The average age of first-time homebuyers is thirty six right in the middle of the millennial range.

States Reporting the Highest Share of Offers Given to First-Time Buyers

Number One: New York

• Share of mortgage offers given to first-time homebuyers: seventy six point one percent
• Average credit score of first-time homebuyers: seven hundred and nine
• Average down payment from first-time homebuyers: $81,188
• Average loan amount offered to first-time homebuyers: $375,534

Number Two: California

• Share of mortgage offers given to first-time homebuyers: seventy percent
• Average credit score of first-time homebuyers: seven hundred and thirteen
• Average down payment from first-time homebuyers: $94,967
• Average loan amount offered to first-time homebuyers: $518,883

Number Three: New Jersey

• Share of mortgage offers given to first-time homebuyers: sixty nine point two percent
• Average credit score of first-time homebuyers: seven hundred and twelve
• Average down payment from first-time homebuyers: $69,553
• Average loan amount offered to first-time homebuyers: $400,037

States Reporting the Lowest Share of Offers Given to First-Time Buyers

Number One: Alaska

• Share of mortgage offers given to first-time homebuyers: forty seven point one percent
• Average credit score of first-time homebuyers: seven hundred and five
• Average down payment from first-time homebuyers: $27,529
• Average loan amount offered to first-time homebuyers: $316,063

Number Two: New Mexico

• Share of mortgage offers given to first-time homebuyers: fifty one point two percent
• Average credit score of first-time homebuyers: six hundred and ninety three
• Average down payment from first-time homebuyers: $33,642
• Average loan amount offered to first-time homebuyers: $268,861

Number Three: Arkansas

• Share of mortgage offers given to first-time homebuyers: fifty two point four percent
• Average credit score of first-time homebuyers: six hundred and ninety three
• Average down payment from first-time homebuyers: $26,191
• Average loan amount offered to first-time homebuyers: $229,102

Why First-Time Buyers?

 As mortgage rates surpassed seven percent, 2024’s housing market was again sluggish, and mortgage demand was near its lowest point in more than twenty years. Unlike repeat buyers, first-time buyers aren’t generally at risk of feeling “trapped” in their current homes due to low locked-in mortgage rates. First-timers may be more likely than repeat buyers to venture into a high-rate housing market since they don’t have to worry about sacrificing older, more attractive rates on their current mortgages. According to LendingTree, first-time buyers were likely more comfortable seeking new mortgages, making them a bigger part of a smaller pool of buyers.

Click here for more on LendingTree’s examination of first-time home buying trends.

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FIRST TIME HOMEBUYERS