First Time Home Buyers Currently Make up 43% of New Home Market

Results of the February survey for the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) reveals that first-time home buyers comprise ~43% of the new home market. The average first-time buyer share has trended upward steadily since NAHB began using the current methodology to measure it in 2016. Between 2018 and 2021 the share grew strongly from 32% to 43%. Of note, the rate on 30-year fixed rate mortgages in the Freddie Mac Lender Survey declined from over 4.75% in October 2018 to under 2.7% by the end of 2020. The National Association of Realtors® (NAR), as a comparison, has been tracking first-time buyers in the broader market that includes purchases of existing homes since the 1980s. According to NAR’s latest Profile of Home Buyers and Home Sellers, first-time time buyers accounted for one-third of that broader market in 2018 and 2019, somewhat below the historic norm of 40%.