Trying to nail down how many first-time buyers are active in the housing market is not always the easiest. New York Federal Reserve researchers are trying to fix that.
Based on the New York Fed's Consumer Credit Panel data set of Equifax credit report data, the researchers wrote, "we are able to create a cleaner identification of first-time homebuyers than the official measure because we can look at the entire history of a household’s credit file back to 1999,” adding, “We define a first-time buyer as the first appearance of an active mortgage since 1999 with no indication of any prior closed mortgages on the borrower’s credit report,” MarketWatch reports.
The first time a mortgage appears on a credit profile is a more appropriate indicator of a first purchase than the URLA data provide, and a more precise measurement than second-hand self-reported identifications as those made through real estate agents, as the NAR data provide. It does have one flaw, however: because it relies on credit profiles, it does not capture home purchases made with cash.
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