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First-Time Buyers Did Not Drive Strong House Price Appreciation in 2021

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Abstract

In May 2022, Sam Khater—chief economist for Freddie Mac—argued that a surge in first-time buyers had been an important driver of the housing market the previous year. In contrast, using data from the New York Fed Consumer Credit Panel, we find that the share of home purchases by first-time buyers fell in 2021. This suggests that other factors were important to the rapid increase in house prices in 2021.

Suggested Citation

  • Donghoon Lee & Joseph Tracy, 2023. "First-Time Buyers Did Not Drive Strong House Price Appreciation in 2021," Liberty Street Economics 20230515a, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:96143
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    File URL: https://libertystreeteconomics.newyorkfed.org/2023/05/first-time-buyers-did-not-drive-strong-house-price-appreciation-in-2021/
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    More about this item

    Keywords

    first-time home buyers; Home Price Appreciation; pandemic;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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