More first home buyers are purchasing a home of their own and they're paying more for them and borrowing more

First home buyers' activity in the housing market continues increasing, with the numbers of them making a purchase, the amount they are borrowing and the estimated prices they are paying, all on the rise. 

According to the latest Reserve Bank data, the number of first home buyers taking out mortgages increased for the third consecutive month in October to 2765. That's the most in any month since November last year.

The amount they are paying for a home is also slowly but steadily on the rise. Interest.co.nz's estimated average first home buyer price has risen for three consecutive months, from $654,601 in July to $673,349 in October.

But that remains down by almost $44,000 from the record average of $717,724 first home buyers are estimated to have paid for a home in April 2022.

Unsurprisingly, the average size of the mortgages they have been taking out has also been rising.

According to Reserve Bank figures, the average size of the mortgages approved to first home buyers has increased for three consecutive months, from $547,813 in July to $565,280 in October.

However, that's also down from the May 2022 peak of $595,398.

One figure that is not rising is the number of low equity mortgages being approved for first home buyers.

Low equity lending, where the borrower has less than a 20% deposit for a home, increased steadily for most of this year, rising from 28.9% of mortgage approvals to first home buyers in December last year to 38.4% in August this year.

But that dropped back to 37.7% in September and 37.3% in October.

The current round of interest rate cuts, with more expected in the New Year, should help first home buyers maintain their current momentum in the market, although, as always, that will be moderated by the extent to which lower interest rates are offset by any rises in house prices and by employment levels and concerns over job security.