First-time Buyers are Younger, Less Sophisticated, Poorer - but Not Riskier

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Posted To: MND NewsWire

A working paper just released by the Federal Housing Finance Agency (FHFA) attempts to determine the reasons why mortgages given to first-time homebuyers perform more poorly than those given to repeat buyers. The Marginal Effect of First-Time Homebuyer Status on Mortgage Default and Prepayment was written by Saty Patrabansh of FHFA's Office of Policy Analysis and Research. Given that homeownership is generally considered a societal benefit and that many government policies focus on incentivizing first-time buyers the author says it is important to understand whether first-time buyers as a group are likely to default at higher rates than repeat buyers both in order to anticipate that an increase in the rate of first-time homeownership could lead to increased foreclosures and negatively affect...(read more)

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Source: http://www.mortgagenewsdaily.com/07102015_first_time_buyers_risk.asp

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