First-time homebuyers are finally starting to come back into the market, with the percentage of buyers who are first-timers growing from 7% in 2021 to 45% in 2022, according to a new report from Zillow released this week.
Zillow’s 2022 Consumer Housing Trends Report takes a deeper look at buyers, and provides a snapshot of what housing consumers are thinking and doing in mid-2022.
Key highlights:
- The median age of U.S. buyers is 44, while the average skews higher at 46 years old. About half (53%) of buyers were born before 1980; almost one in five buyers (17%) are in their twenties or younger, while roughly a quarter (23%) are in their sixties or older.
- The annual median household income among buyers is approximately $86,000, compared to the overall national median in 2020 of $65,700.
- 45% of buyers have at least a four-year degree, higher than 34% of overall U.S. household decision makers.
- About one in four (24%) of first-time buyers said that they had to buy a home quickly—compared to a smaller share (11%) of repeat buyers. About half (47%) of repeat buyers said that they were able to take their time and explore their options, compared to about a third (37%) of first-time buyers.
- Consistent with a greater share of buyers purchasing with a mortgage, along with a greater share of first-time buyers, the share of buyers that reported at least one mortgage denial before getting approved fell from from 34% in 2021 to 28% in 2022.
- One in ten (9%) of Baby Boomer and Silent Generation mortgage borrowers reported being denied financing—much lower than 25% of Gen X, 39% of Millennial and 32% of Gen Z mortgage buyers.
Major takeaway:
While the housing market is still skewed in the direction of older generations, younger first-time homebuyers are starting to see more opportunities in the market again, according to the report.
“First-time buyers now appear to be making relative gains as high mortgage interest rates disproportionately encourage current homeowners to stay put,” said Zillow population scientist Manny Garcia. “The flow of homes into the market is slowing, suggesting homeowners are likely comparing their current low mortgage rate to today’s rates and deciding not to move. While rising mortgage rates are hurting affordability for all buyers, first-time buyers may be less deterred by higher rates because they’re comparing a monthly mortgage payment to what they’re paying in rent.”
For the full report, click here.
