Numbers Count: First-time buyers’ revival?

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Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.

The numbers: Demand for FHA, VA mortgages rises

Young, happy African-American family in front of a house that is for sale. [1]FHA and VA purchase mortgage applications have outpaced conventional mortgage demand since last spring, and the gap has widened considerably since January, according to a new report [2] on overall economic conditions from Fannie Mae’s Economic & Strategic Research (ESR) Group. ESR says the demand for these government mortgage programs is “perhaps an early indicator that the long-dormant first-time homebuyer segment is building momentum.”

What counts: Fannie Mae’s report aligns with a report last week from our Chief Economist Scott Anderson, who is bullish on housing [3]. Here are his reasons for being upbeat about prospects for first-time homebuyers:

  • Student loan debt has been declining;
  • There’s a big comeback in household formation (children leaving their parents’ home, singles moving out of shared housing to start their own households, etc.);
  • The labor market is showing tentative signs of improvement; and
  • Interest rates continue to hover near historically low levels

Individual financial circumstances are all different, but the big-picture indicators suggest 2015 may be a good time for first-time homebuyers to be in the market.

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