First-Home Buyers Drive Rising Low-Deposit Lending Amid Market Shifts

In the current housing market, many homebuyers are adopting alternative strategies to navigate challenges such as high prices, mortgage rates, and inventory shortages. Baby boomers like Chris and Terri Darden are leveraging co-ownership platforms such as Acre to purchase homes without committing to full mortgages, allowing them to avoid large debts and gain equity shares. First-time buyers are increasingly entering the market with less than the traditional 20 percent deposit, supported by bank allowances for low-deposit lending primarily aimed at this group. Despite a recent increase in home inventory, levels remain below pre-pandemic norms, reflecting a ongoing housing shortage rather than an oversupply, which suggests a more stable market rather than a crash. Meanwhile, some buyers are choosing to purchase now despite high mortgage rates, prioritizing building home equity over waiting for potential rate reductions or price drops, especially given the uncertainty around future Federal Reserve decisions. Rising rents and the desire to stop paying landlord costs are also motivating buyers to enter the market sooner rather than later.