Decade-High Share of First-Time Homebuyers

Around half of all home buyers are now first-time buyers, which is likely the highest proportion since around 2010, aided by Zillow’s 2023 Consumer Housing Trends Report. The share of first-time buyers among all home buyers has risen from 45% last year to 50%, a significant jump from 37% in 2021. This increase in first-time buyers contributes to demand and price growth in a market where mortgage rates have surpassed 7%, though affordability remains challenging. The report indicates that most first-time buyers use various sources, including personal savings, family or friends’ gifts, and down payment assistance programs, to finance their down payments.

The rising number of first-time buyers, who account for a more significant part of a comparatively smaller market, suggests that many are finding solutions to overcome the hurdles of homeownership. While affordability remains a hurdle, with the time needed to save for a down payment increasing from nine to nearly 12 years since the pandemic, the fact that half of home buyers are first-timers demonstrates their resilience and determination in pursuing homeownership. Millennials represent almost half of first-time buyers, while Gen Z adults constitute over 27% of this group.

Office Return Spurs Suburban Home Shopping

The return-to-office trend is prompting a surge of interest in suburban areas surrounding major metropolitan centers among home shoppers, driven by a desire for affordability and convenience. Realtor.com’s recent data reveals a notable uptick in homebuyers seeking properties within feasible commuting distance to large urban hubs, reflecting the shift towards in-person work.

Danielle Hale, Chief Economist for Realtor.com, explained that the current home shopper focuses on balancing cost and convenience in locations close to major cities. This year’s list of the hottest ZIP codes includes affordable markets and pricier areas near urban cores, appealing to those seeking the right combination of size and amenities within reasonable reach of city centers.

The 2023 Hottest ZIP Codes in America, as ranked by Realtor.com, encompass various regions across the country, showcasing a diverse array of locations that offer desirable attributes for homebuyers. Homes in these ZIP codes are spending considerably less time on the market (10 to 25 days) compared to the national average of 45 days, and they’re also attracting significantly more visitors per property on Realtor.com in June.

July Sees Increase in New Home Sales

In July, new single-family home sales reached a seasonally adjusted annual rate of 714,000, marking a 4.4% increase over the revised June rate of 684,000 and a significant 31.5% surge compared to the July 2022 estimate of 543,000. The median sales price for these new homes was $436,700, with an average price of $513,000. These prices showed a slight uptick from June figures, when the median sales price was $415,400, and the average was $494,700. This surge in new home sales is particularly noteworthy amidst a real estate market where existing home sales experienced a 2.2% decline in July.

The growing appeal of new home sales is evident. New home inventory comprised nearly 31% of the total in July, a significant increase from the pre-pandemic average of about 11%. This shift highlights new homes’ role as a viable alternative when existing homes are scarce. The data also reveals that the number of homes for sale that still need to be started rose to 108,000, the highest level in survey history. This suggests that housing starts will remain strong in the coming months if demand persists.

 

Source:

Vaimberg, Ron. “Weekly Newsletter – January 6, 2023.” Ron Vaimberg International, Ron Vaimberg, 6 Jan. 2023, https://rvionline.thinkific.com/courses/take/rvi-weekly-newsletter/texts/41523497-weekly-newsletter-january-6-2023.