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2 posts on "home price inflation"
May 15, 2023

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

Donghoon Lee and Joseph S. Tracy

Photo of family moving into their first home; taking boxes out of a truck. Parents and two daughters.

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. 

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Posted at 7:00 am in Equitable Growth, Housing, Inflation | Permalink
May 12, 2022

First‑Time Buyers Were Undeterred by Rapid Home Price Appreciation in 2021

Donghoon Lee and Joseph Tracy

Photo: young ethnic family looking at a home with house of sale sign and sold over it.

Tight inventories of homes for sale combined with strong demand pushed up national house prices by an eye-popping 19 percent, year over year, in January 2022. This surge in house prices created concerns that first-time buyers would increasingly be priced out of owning a home. However, using our Consumer Credit Panel, which is based on anonymized Equifax credit report data, we find that the share of purchase mortgages going to first-time buyers actually increased slightly from 2020 to 2021.

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Posted at 7:00 am in Equitable Growth, Household Finance, Housing, Inflation | Permalink

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Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

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