To determine if you are a first-time or second-time homebuyer, check if you have previously owned a principal residence. First-time buyers have never owned a home before, while second-time buyers have owned a home at least once. Government programs like the Federal Housing Administration (FHA) and tax credits often define first-time buyers as those without a mortgage or property ownership in the past three years. For example, the FHA requires a one-year ownership gap for second-time buyers.

This distinction matters because first-time buyers typically qualify for lower down payment requirements, down payment assistance, and tax incentives. According to the National Association of Realtors (NAR), 44% of homebuyers in 2022 were first-time buyers, driving demand for entry-level housing. The U.S. Census Bureau reports that homeownership rates for repeat buyers are 15 percentage points higher than for first-time buyers, reflecting their stronger financial stability. Programs like the First-Time Homebuyer Tax Credit (up to $8,000 in 2008) and FHA loans (3.5% down payment) disproportionately benefit first-time buyers, reducing barriers to homeownership. Second-time buyers often rely on equity from previous sales, with the median equity gain for repeat buyers at $120,000 in 2023 (Zillow). These differences highlight how homebuyer status impacts market dynamics and policy effectiveness. Ensuring accurate classification supports equitable access to housing and informed policymaking.