In recent years, purchasing a home has become incredibly challenging for many Americans.
With today’s high mortgage rates and home prices, many potential buyers have refrained from entering the housing market in 2023. However, according to recent LendingTree data, first-timers made up a far larger percentage of those who continued to be active in the market than did those who were already homeowners.
Research found that 65% of mortgage offers made to LendingTree platform users between January 1 and December 31, 2023, were made to first-time buyers through a nationwide review of those offers. That number was noticeably greater in a number of states, such as California and New York.
Key Findings:
- Nationwide, first-time homeowners received 65.25% of all mortgage offers issued on LendingTree’s platform in 2023. In South Dakota, the percentage of offers made to first-time purchasers was 54.29%, while in New York, it was 77.30%. Overall, in every U.S. state, over half of all bids were made by first-time buyers.
- New York, California, and New Jersey have the largest percentages of first-time homebuyer mortgage offers. As previously stated, first-time buyers received 77.30% of offers in New York. In California and New Jersey, the shares were 73.15% and 72.22%, respectively. In pricey states like New York and California, where current homeowners may be particularly reluctant to give up their older, lower-rate mortgages, first-time buyers may be more prevalent. Ultimately, the larger the mortgage, the more the monthly payments will be at a new, higher rate.
- South Dakota, Alaska, and Arkansas are the states where first-time homebuyers receive the lowest percentage of mortgage offers. First-time homebuyers in South Dakota received 54.29% of all mortgage offers. In Alaska, the percentage was just somewhat higher at 54.38%. In Arkansas, it was 56.19%.
- All things considered, first-time homebuyers have lower credit scores, smaller down payments, and lower proposed mortgage amounts than repeat customers. Across all 50 states, first-time purchasers’ credit scores are, on average, almost 32 points lower than those of repeat buyers. Loan amounts are, on average, $49,021 smaller, and down payments are, on average, $42,218 less.
States Where the Highest Shares of Mortgage Offers are Given to First-Time Homebuyers:
- New York
- California
- New Jersey
- Massachusetts
- Rhode Island
- Wisconsin
- Oregon
- Hawaii
- Washington
- North Dakota
Known as “The Big Apple”, the famed state of New York is home to more than 8.4 million residents.
No. 1: New York
- Share of mortgage offers given to first-time homebuyers: 77.30%
- Average credit score of first-time homebuyers: 705
- Average down payment from first-time homebuyers: $65,185
- Average loan amount offered to first-time homebuyers: $355,709
No. 2: California
- Share of mortgage offers given to first-time homebuyers: 73.15%
- Average credit score of first-time homebuyers: 692
- Average down payment from first-time homebuyers: $59,904
- Average loan amount offered to first-time homebuyers: $459,746
No. 3: New Jersey
- Share of mortgage offers given to first-time homebuyers: 72.22%
- Average credit score of first-time homebuyers: 699
- Average down payment from first-time homebuyers: $52,262
- Average loan amount offered to first-time homebuyers: $367,404
States Where the Lowest Shares of Mortgage Offers are Given to First-Time Homebuyers:
- South Dakota
- Alaska
- Arkansas
- Iowa
- Wyoming
- Mississippi
- Oklahoma
- Alabama
- Missouri
- Montana
Home to Mount Rushmore, South Dakota is a sparsely populated midwestern U.S. state with a population of less than 900,000.
No. 1: South Dakota
- Share of mortgage offers given to first-time homebuyers: 54.29%
- Average credit score of first-time homebuyers: 685
- Average down payment from first-time homebuyers: $20,878
- Average loan amount offered to first-time homebuyers: $255,293
No. 2: Alaska
- Share of mortgage offers given to first-time homebuyers: 54.38%
- Average credit score of first-time homebuyers: 703
- Average down payment from first-time homebuyers: $20,359
- Average loan amount offered to first-time homebuyers: $290,817
No. 3: Arkansas
- Share of mortgage offers given to first-time homebuyers: 56.19%
- Average credit score of first-time homebuyers: 687
- Average down payment from first-time homebuyers: $22,577
- Average loan amount offered to first-time homebuyers: $241,314
To read the full report, including more data, charts, and methodology, click here.
