Share of First-Time Homebuyers Steadily on the Rise

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:

  1. New York
  2. California
  3. New Jersey
  4. Massachusetts
  5. Rhode Island
  6. Wisconsin
  7. Oregon
  8. Hawaii
  9. Washington
  10. 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

  1. Share of mortgage offers given to first-time homebuyers: 72.22%
  2. Average credit score of first-time homebuyers: 699
  3. Average down payment from first-time homebuyers: $52,262
  4. Average loan amount offered to first-time homebuyers: $367,404

States Where the Lowest Shares of Mortgage Offers are Given to First-Time Homebuyers:

  1. South Dakota
  2. Alaska
  3. Arkansas
  4. Iowa
  5. Wyoming
  6. Mississippi
  7. Oklahoma
  8. Alabama
  9. Missouri
  10. Montana

Home to Mount Rushmore, South Dakota is a sparsely populated midwestern U.S. state with a population of less than 900,000.

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.

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Picture of Demetria C. Lester

Demetria C. Lester

Demetria C. Lester is a reporter for MortgagePoint (formerly DS News and MReport) with more than eight years of writing and editing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is a jazz aficionado, Harry Potter fanatic, and likes to read. She can be reached at demetria.lester@thefivestar.com.
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