The COVID-19 pandemic had a significant impact on the real estate market, triggering sharp increases in both mortgage rates and property prices. Many felt these by-products would most adversely affect first-time homebuyers (FTBs), causing a widening in the gap between them and repeat mortgage purchasers. But has this been the case?
The Federal Reserve Bank of New York has investigated these effects recently. Some highlights of their findings follow.
Mortgage Size – after an initial widening of the gap between the size of mortgages for FTBs and repeat mortgage purchasers, the gap has actually narrowed since 2022. 2022’s median gap of $36,750 had fallen to $29,653 by 2024.
Credit Score – As expected, the average repeat buyer credit score remains higher than the average FTB score. However, the post-COVID period has seen significant increase in the scores for both groups, from 758 and 718 in 2019 to 775 and 734 in 2024, respectively.
Age – Have increased mortgage rates and home prices forced FTBs to put-off or delay their initial home purchases? In 2019, the average age of an FTB was 36.4 years old with a median age of 33. These numbers have remained consistent over the most recent 5-year period, with 2024’s numbers coming in at 36.3 and 33, respectively. The increased financial burden does not appear to have had much effect on the age at which individuals purchase their first home.
Income – The average income disparity gap between FTBs and repeat buyers has shown a modest increase since 2019, growing from $13,530 to $16,969 in 2024.
Post-COVID FTBs have proven themselves more resistant to rising mortgage rates and home prices than many initially feared. For a more in-depth look at this topic, please access the full article here.
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Thomas Curran
Founder & Co-CEO
Curran Wealth Management
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