Are first-time buyers still active in the agency market?

“While it remains a tough market for prospective purchasers, our eMBS agency securities database revealed that first-time homebuyers actually made up 55% of all agency purchase mortgages last year. That’s the highest share in the 10 years we’ve been tracking the metric,” he said.

Walden explained that purchase loans by these first-time homebuyers made up 39% of all GSE securitizations.

“The market in which these folks purchased their first home was one of record house prices, ballooning down payments, rising rates and elevated DTIs. Given record exposure to first-time homebuyer loans, it’ll be worth watching the performance of this cohort very closely moving forward, particularly for those invested in 2023 agency MBS,” said Walden.

While FTHBs had higher front-end DTIs compared to repeat buyers, their back-end DTIs were more comparable as they spent a large part of their income on housing but paid less on other forms of debt.

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