iStock photo illustration

A new study from the Harvard Joint Center for Housing Studies has found the large number of Millennials entering prime first-time homebuying age in recent years has not compensated for the decline in first-time homebuying caused by the smaller Generation X from 1997 to 2013.

Using data from the U.S. Census Bureau’s American Housing Survey, administered every two years, the JCHS found that the annual volume of first-time home purchases and first-time homebuyers’ share of all purchases both dropped from 1997 to 2013. Both figures dropped from 2.13 million homes (or 2.1 percent of all households) in 1997 to 1.98 million homes and 1.9 percent of all households in 2003, to just 1.46 million households (1.3 percent) in 2013. From 2015 to 2017, those figures rebounded somewhat but still remained below pre-Great Recession levels, rising to 1.82 million homes and 1.5 percent of all households.

“Had the rate of first-time homebuying held at the 1997 level, an additional 775,000 households would have made a first-time home purchase in 2017,” the study states.

The paper’s authors speculate the long decline was caused by the small size of Generation X relative to the Baby Boomer generation, limiting the number of potential buyers of prime first-time homebuying age.

The study also found that increasing numbers of Americans are buying homes before getting married, with around 35 percent of first-time homebuyers in 2017 having never been married, up from just over 20 percent in 1997, compared to just over 50 percent who were married in 2017.

The study found about 60 percent of first homes nationwide were between 1,000 and 1,999 square feet in 2017, a figure which has stayed roughly consistent since 1997. The plurality of homes that year – about 35 percent – cost between $100,000 and $199,999. Meanwhile, the share of first-time homebuyers with incomes over $100,000 rose substantially from 2015 to 2017, from just over 25 percent to roughly 30 percent, while roughly half of first-time homebuyers nationwide made less than $75,000.

First-Time Homebuying Not Yet Rebounded to Pre-Crisis Levels, Study Finds

by James Sanna time to read: 1 min
0