First-Time Homebuyers Affected by Historical Challenges

Abstract

This article examines first-time homebuyers' participation in the market since 2000 and how first-time buyers are adjusting to historically challenging conditions such as higher down payments and mortgage burden. Since peaking in late 2020, home sales—particularly those of existing homes—have declined significantly. Rising home prices and mortgage rates have worsened affordability. At the same time, homeowners with low mortgage rates may be reluctant to put their homes up for sale ("rate lock-in" effect), which has curtailed the inventory of existing homes for sale and mitigated the typical downward pressure on home prices as mortgage rates rose. First-time buyers have been especially affected by these developments.

Author:

Christian Malagon