A Better Measure of First-Time Homebuyers

Donghoon Lee and Joseph Tracy

No 20190408, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Much of the concern about affordable homeownership has focused on first-time buyers. These buyers, who are often making the transition from renting to owning, can find it difficult to save to meet down-payment requirements; this is particularly true in those areas where rent takes up a significant portion of a household's monthly income. In contrast to first-time buyers, repeat buyers can typically rely on the equity in their current house to help fund the down payment on a trade-up purchase; they also have an easier time qualifying for a new mortgage if they've successfully made payments on a prior mortgage, thereby improving their credit score. Despite the policy focus on first-time buyers, reliable data on these buyers do not exist. In this first of three posts, we introduce a better measure of first-time buyers and examine the dynamics of this group over the past seventeen years. In our next post, we will describe the characteristics of first-time buyers. We will conclude this part of the housing series by examining the sustainability of homeownership for first-time buyers.

Keywords: Consumer Credit Panel; household finances; mortgages; first-time home buyers (search for similar items in EconPapers)
JEL-codes: R31 (search for similar items in EconPapers)
Date: 2019-04-08
New Economics Papers: this item is included in nep-ure
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