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Mortgage Applications Are Increasing, but First-Time Buyers Aren’t Behind the Surge

Market Data + Trends

Mortgage Applications Are Increasing, but First-Time Buyers Aren’t Behind the Surge

Why many first-time buyers are sticking to the sidelines despite low mortgage rates

December 3, 2021
Mortgage application on desk

Home buying demand has rebounded in recent weeks, though first-time buyers make up only a small share of mortgage applicants as dwindling supply leaves few affordable options on the market. First-time buyers not only face a shortage of around 5.2 million homes, according to, but they also struggle to compete with repeat buyers backed by equity from previous homeownership. 

Mortgage rates have also risen from ultra-lows at the start of 2021 and economists expect them to continue rising into the new year, further extending obstacles for first time buyers after a year of limited market affordability. 

There’s been a rebound in home-buying demand in recent weeks, as evidenced by mortgage application data. But first-time buyers aren’t behind the surge.

The latest data from the Mortgage Bankers Association, for the week ending Nov. 26, showed that overall mortgage applications dropped 7.2% on a weekly basis. But loan applications for mortgages meant to purchase homes increased by 5.1% week-over-week, building on the previous week’s 4.7% uptick.

Overall, in November, mortgage applications for loans intended for purchasing homes increased by 7% in November, according to an analysis from Joshua Shapiro, chief U.S. economist at MFR Inc. That’s compared with a 1% decline in October and an 8% gain in September. But when diving deeper into the data, it’s clear that not all buyers are flocking back to the market in similar numbers.

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