October 21, 2019
Differences Between First-Time and Repeat Home Buyers
The past two decades have seen interesting shifts in the landscapes of homeownership and purchasing—particularly with regard to the divergence among the landscape into which first-time purchasers and repeat home buyers have entered into.
According to an April report released by the New York Fed, in the early 2000s the average balances for origination mortgages were fairly similar for these two cohorts—falling at around $128,000 for first-time buyers, and around $152,000 for repeat purchasers. Interestingly, the housing bubble that grew through that decade did more to raise prices for repeat buyers than for first-time buyers. Between 2003-2006, the average repeat homebuyer saw their average mortgage balance rise by about $68,000, which comes out to around 13 percent annually. The rise in balance for first-time buyers went up by only around $33,000, which is about 8 percent annually.
Between 2000-2016, the average mortgage balance has risen overall, but the trend has held. For first-time buyers the balance has gone up by about 84 percent, while for repeat buyers that number has gone up 92 percent.
In order to move from renting into the benefits of homeownership, a household must be able to handle the obligations—especially financial obligations—that are necessary for purchasing (the initial down payment and the ensuing monthly mortgage payments), property taxes, and maintenance of the home. And in order to secure the mortgage in the first place, the potential buyers meet a certain threshold of creditworthiness.
Credit scores for first-time buyers in 2000 averaged around 670; repeat buyers averaged at 705. During the 2003-2006 bubble, the average first-time buyer credit score rose to 683, after which it came back down to about 673 for a time, but went through a steady rise thereafter—by 2013, the average credit score for first-time buyers reached 717. For repeat buyers, who went through a similar roller-coaster, the average 2013 score stood at 757.
When one buys a home, whether for the first time or the third, it is important that they receive clear title to their new property. Topouzis & Associates, P.C. is the home buyer’s bulwark against problems of the past. We do title searches and ensure you are gaining clear title to your property—and we back our services with offerings of title insurance (click here), in case someone along the line of ownership did something that will weaken your title at some point in the future.