A First Time for Everything: 65% of Mortgage Offers on LendingTree Platform Go to First-Time Homebuyers

For many, buying a home has been exceedingly difficult in the past few years.

With mortgage rates and home prices as high as they’ve been, various would-be buyers stayed out of the housing market in 2023. But the latest LendingTree data shows that of those who remained active in the market, first-timers were much more common than those who already owned a home.

Through a nationwide analysis of mortgage offers given to users of the LendingTree platform from Jan. 1 through Dec. 31, 2023, we found that 65% went to first-time buyers. Moreover, that figure was notably higher in many states, including New York and California.

Key findings

• Nationwide, 65.25% of mortgage offers made on the LendingTree platform in 2023 went to those who identified as first-time homebuyers. The share of offers to first-time buyers ranged from 77.30% in New York to 54.29% in South Dakota. First-time buyers accounted for more than half of all offers in every state.
• The states where the highest shares of mortgage offers are given to first-time buyers are New York, California and New Jersey. As mentioned, 77.30% of offers in New York went to first-time buyers. The shares were 73.15% and 72.22% in California and New Jersey. First-time buyers might be more common in expensive states like New York and California because current homeowners there might be especially unenthusiastic about parting with their older, lower-rate mortgages. After all, the larger your mortgage, the more a new and higher rate will increase your monthly payments.
• The states where the lowest shares of mortgage offers are given to first-time buyers are South Dakota, Alaska and Arkansas. In South Dakota, 54.29% of mortgage offers went to first-timers. That figure was only slightly higher in Alaska, at 54.38%. It was 56.19% in Arkansas.
• Across the board, credit scores, down payments and offered mortgage amounts are lower for first-timers than for repeat buyers. On average, credit scores for first-time buyers across the 50 states are about 32 points lower than those of repeat buyers. Down payments are an average of $42,218 lower, while loan amounts are, on average, $49,021 smaller.

States where the highest shares of mortgage offers are given to first-time homebuyers

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

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

Why large shares of offers go to first-time homebuyers

In the face of high mortgage rates, 2023’s housing market was extremely sluggish. While some were still house hunting, homebuyers were relatively few and far between, and mortgage demand was at its lowest point in more than 20 years.

It’s also worth pointing out that even though newcomers made up a large share of buyers, 2023’s market wasn’t necessarily flooded by massive numbers of them. First-time buyers were likely more comfortable seeking new mortgages, making them a bigger part of a smaller pool of buyers.

That said, the housing market wasn’t entirely dominated by newbies. On the contrary, some types of buyers not necessarily reflected in our data — like those who pay cash for their homes or repeat buyers who don’t shop around for a new lender — still purchased homes.

Nonetheless, our data is clear that first-timers were a major force to be reckoned with in 2023. As long as rates remain elevated, first-timers will likely continue to play a dominant role in 2024.

Tips for first-time homebuyers

Though some first-timers are buying homes, that doesn’t mean doing so is easy. Here are three tips to help homebuying beginners.

• Give yourself time to prepare. Buying a home can be a challenge, especially if you’re trying to rush the process. The more time you give yourself to do things like save for a down payment, strengthen your credit score and house hunt, the less stressful homebuying is likely to be. On top of that, the more time you have to prepare to buy a house, the less likely you are to make knee-jerk decisions you end up regretting.
• Take advantage of first-time buyers programs. Various programs exist to help first-time buyers purchase a home. While not available to everyone, these programs can help some would-be buyers get more favorable loan terms and reduce upfront costs like those associated with a down payment.
• Shop around for a mortgage. Different lenders can offer different rates to the same borrowers. By shopping around and comparing mortgage offers before you buy, you could find a lower-rate (and more affordable) option than you would’ve gotten had you gone with the first lender.

Methodology

LendingTree analyzed mortgage offers given to borrowers who identified as first-time or repeat homebuyers across the nation’s 50 states (excluding D.C. and the U.S. territories) from Jan. 1 through Dec. 31, 2023.