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Mainstream media has zeroed in on a dramatic and sobering narrative: the American dream of homeownership is slipping away, particularly for first-time buyers. An article today in Wall Street Journal argues that the number of first-time homebuyers has collapsed, affordability has vanished, and even builders can’t sell homes without deep discounts. Renters, the story goes, are now permanently sidelined, and builders are running out of tricks. This framing is powerful, but does this narrative hold up under scrutiny?
At Polygon Research, we don’t rely on broad national averages or generalized sentiment. We analyze loan-level data that captures market activity in real time. And what we’re seeing is something more complex than a straight-line collapse. Yes, volume is down from the boom years, and affordability is strained. But the picture is far from uniform, and it’s not universally grim.
The numbers cited in the WSJ article are headline-worthy. There were just 1.1 million first-time buyers in 2024, about half the 20-year average. Builders report offering unprecedented incentives. Monthly payments on a median-priced home now require an income of $127,000, up from $79,000 in 2021. And the number of renter households has reached a record high.
The takeaway is clear: demand is falling, the entry-level market is freezing, and homeownership is becoming a luxury. But this interpretation leans heavily on aggregate statistics that smooth over the real, on-the-ground complexity of local housing markets.
Using our Polygon Vision platform, we analyzed purchase mortgage originations for first-lien, one-to-four-unit primary residences, excluding business and commercial loans. These are typically the types of mortgages used by first-time homebuyers to finance the purchase of a home. There has been a clear decline in volume since the 2021 peak, especially as mortgage rates climbed. However, the downturn is not evenly distributed, and in fact we saw slight uptick in mortgage production volume in 2024 compared to 2023.
Some neighborhoods continue to show consistent production, particularly in price tiers aligned with the 25th to 60th percentile of local property values. First-time buyers are still active, but are moving carefully and targeting affordability, not chasing the median-priced home.
Consider Brooklyn (Kings County, NY). In 2024, Brooklyn saw 5,450 purchase originations meeting the criteria above. But within Brooklyn, property values vary dramatically by census tract. One tract may have a typical value of $1.56 million; another, $2.07 million; yet another, $4.32 million. In that context, buyers are responding to micro-market conditions, not broad national pricing.
This matters because first-time buyers don’t chase the median - they find pockets where price and credit conditions align with their financial reality. Averages obscure this kind of segmentation. When we track the distribution of property values by age of applicant and by quantile, we see that younger buyers typically enter the market below the 60th percentile of local property values. So again, taking the Brooklyn housing market for example, homebuyers are not trying to buy the average home, but targeting what they can afford, and what lenders are willing to finance.
Rising mortgage rates have been a dominant topic, often presented as an insurmountable barrier. However, examining our granular data from Polygon Pulse's MBS Pivot reveals how both first-time and repeat buyers have adapted their financing strategies in this environment.
Consider the difference between the average rates for agency mortgage-financed home purchases (30YR Fixed Rate Fannie Mae, Freddie Mac, and Ginnie Mae) by borrower type over time.
Much of the public narrative assumes that first-time buyers are paying more, either because they’re riskier borrowers or have fewer financing options. But that assumption doesn’t hold up when you look at the data.
While the average rate has certainly increased for all borrowers since 2022, this chart from MBS Pivot illustrates that both first-time buyers (FTHB) and non-FTHB segments are operating within very similar rate environments. This suggests that the current rate landscape impacts all mortgage-financed buyers, rather than selectively sidelining first-time buyers more severely than others. Understanding this shared experience is key for mortgage product development and client communication. In fact, Since 2022, first-time buyers have consistently received lower average interest rates than repeat buyers. In 2023, the gap was 8 basis points in favor of first-time buyers (6.57% vs. 6.65%). In 2024, the gap was 11 basis points. So far in 2025, the spread has grown slightly, with FTHBs averaging 6.46% compared to 6.61% for repeat buyers.
This trend, observed in Polygon Pulse, reflects the impact of targeted programs, lender pricing strategies, and the growing influence of agency products geared toward affordability, including the long standing FHA, VA and USDA loan programs. FTHBs are often accessing programs that include rate buydowns, low down payment options, and pricing incentives that are not typically extended to repeat buyers, especially those using the FHA loan program.
Our analysis of the agency data as well as the HMDA data over time, challenges the idea that affordability constraints are solely rate-driven for first-time buyers. While elevated rates do suppress affordability across the board, FTHBs are not bearing the brunt of that pressure through higher pricing. If anything, they are comparatively advantaged, at least on rate terms, thanks to structured support from lenders and the use of the FHA loan.
This kind of nuance disappears in national averages and news headlines. Only by analyzing loan-level data can we see the true dynamics of the market, and avoid repeating easy but incorrect assumptions.
The popular media narrative assumes that every gain for landlords or rental REITs is a loss for aspiring homebuyers, and vice versa. It casts the market as a zero-sum game in which one group’s stability necessarily comes at the expense of another’s. But our data shows that the market is not that binary.
Many renters are not “trapped.” They are pausing. They are watching rates. They are calculating. And in the meantime, they’re often living in areas where property values are adjusting or where new supply may ease pressure in the next year. Demand has not disappeared; it has repositioned.
Builders, too, are not panicking. Yes, incentives have increased. But that’s a rational response to rising borrowing costs, not a sign of structural failure. Builders are shifting their product mix and adapting to a new rate environment. They are not exiting the market.
The narrative of "unaffordable homes" often simplifies a complex reality. Our Polygon Vision tool allows for a precise examination of property value distribution by applicant age, showcasing where mortgage-financed purchases are occurring and in what price range.
Here's a breakdown of 2024 production data for mortgage-financed purchases by applicant age and property value quantiles:
This granular data, available through Polygon Vision (a bundle of HMDAVision and CensusVision), is invaluable for identifying genuine affordability points within the mortgage market. It clearly illustrates that for younger, typically considered to be first-time home buyer age groups, a substantial number of mortgage-financed purchases are indeed occurring at price points well below the national median. This level of detail supports precise fair lending analysis and enables highly targeted mortgage marketing strategies, allowing you to reach viable borrowers where they are.
The press has every right to cover the difficulties first-time buyers face. Affordability is real, and access is uneven. But the prevailing narrative flattens a complex picture into a simple crisis headline. At Polygon Research, we use data to tell the fuller story - one of variation, segmentation, and market evolution.
Buyers have not disappeared. Builders have not collapsed. What has changed is the need to look closer and listen harder to what the data is really saying.
The mortgage and housing finance landscape is complex, and relying solely on high-level headlines can obscure critical opportunities and misinform strategy. At Polygon Research, we empower professionals to move beyond generalized "bad news" and instead embrace objective, data-driven insights that point to opportunity.
Our powerful SaaS market intelligence tools provide the precision and depth you need:
By leveraging Polygon Research's commitment to open data and advanced analytical capabilities, you can gain a competitive edge. Understand the true state of the market, identify growth segments like the persistent first-time home buyer pool, and develop data-backed strategies that drive success and profitability, even when the broader media narrative focuses on challenges.
Unlock the full story of the mortgage market. Explore the power of Polygon Research's unparalleled micro-data intelligence today and start a free trial.