During the third quarter, there was an increase and experts see the number of people purchasing a home for the first time about to rise. First-time homebuyers purchased 591,000 in the third quarter alone which is a one percent growth. These buyers represent 39 percent of the total real estate market. They also represent a large number of loans that are being given to homebuyers.
As millennials are approaching the age of 30 they are looking to purchase a home. The increase in homeownership for people in their late 20s or those entering their 30s are looking to transition from renting a home to purchase a home. There is a large increase of first-time buyers and they are a mixed group. Those between the ages of 23 and 38 are looking to transition to owning a home. Those on the younger side are going to be looking to purchase a home in the next couple of years as they become older. The transition to homeownership is only around halfway done and there will be addition buyers in the future. They are waiting until they have stable jobs and can make their mortgage payments.
Thirty-two of the 50 states have seen an increase in home buyers. Florida leads the way with a 6 percent increase which was the biggest increase of the year. Texas saw a 3 percent increase and California, New Jersey, and Arizona have also seen an increase in their home market.
Experts say some things are helping increase the rate of the homeowner for many people especially the younger generation. Interest rates are still low and there has been a slow increase in the price of homes. This makes it more affordable to purchase a home. A fixed-rate mortgage for 30 years has an average interest rate of 3.6 percent. The interest rates for first time home buyers averaged at 4.11 percent which is still low. This is the lowest interest rate in the market since 2016. The cost of rent is also steering younger generations to purchase a home. With rent reaching record highs many young people find it easier to save money by becoming homeowners. They can save hundreds of dollars a month and will have something to show for it. They are also using their homes as investments. They can see the home down the road when the prices increase which will help the younger generation make a nice profit and they are always looking for ways to make money.
There is also the down payments that have decreases. There is a low downpayment for first time home buyers. Around 88 percent of the loans issued in 2018 went to people that were purchasing their first home. The homebuyers are only putting down three to five percent of the total purchase price making it easier for them to get into their home.