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First-time buyers: how do they finance their purchases and what’s changed?
Average first-time buyer (FTB) house prices have risen by 60% over the past 15 years and homeownership has fallen. How did those who bought their first home finance it and how has this changed? i) We find that average incomes of FTBs have risen. ii) But age-cohorts with the most FTBs (e.g. millennials) have recently experienced below-average income growth. iii) FTBs are therefore increasingly richer than their classmates: in 2018 they had 1.8x the mean cohort income vs. 1.5x in 2006. iv) FTBs are also taking on bigger mortgages. v) But monthly FTB mortgage payments have actually remained flat as lower interest rates ... (full story)