The share of first-time buyers dropped to a three-decade low of 32 percent in 2015 but got a bit of a bump last year, up to 35 percent. That figure is expected to rise.
Fox Business reports that most major home builders are shifting toward starter home production and away from luxury homes, which were the prime money makers for builders in the years after the recession.
In the first quarter of this year, 31 percent of spec homes constructed by major builders were smaller than 2,250 square feet, up from 27 percent in Q1 2016 and 24 percent in early 2015. Also, lenders are giving more mortgages to first-time buyers, and builders such as Tri Pointe are offering new products that appeal to Millennials.
The return of first-time buyers allays fears that millennials would eschew homeownership and provides a long-awaited infusion of new demand to the market. These new buyers could also be a boon to the overall economy by driving builders to build more homes.