First time homebuyer demand surged to its highest level in 17 years during the third quarter of 2017, according to the First-Time Homebuyer Market Report from Genworth Mortgage Insurance, an operating segment of Genworth Financial.

The report, which is drawn from a data set of 21 million first-time homebuyers over a 24-year span, showed first-time homebuyers purchased 601,000 single-family homes in the third quarter. This is up 6% from 567,000 homes during the third quarter of 2016, and the highest quarterly purchase volume since the third quarter of 2000.

“First-time homebuyers bought the most homes in a quarter since the third quarter of 2000, buoying the broader housing market that had slowed during this period, -1% growth compared to Q3 of 2016,” said Tian Liu, Genworth Mortgage Insurance chief economist. “The surge in first-time homebuyer demand, and the decline in overall purchases, was driven by supply-demand imbalances in today’s housing market.”

First-time homebuyers accounted for 40% of all single-family homes sold in the third quarter and 56% of all purchase mortgages financed, the report showed.

And for the first time since 2011, repeat homebuyer demand declined. Repeat homebuyers bought 5% fewer homes during the third quarter at 888,000 homes than in the third quarter of 2016, according to Genworth’s report.

“Supply shortages are making homes less affordable, reducing incentives to existing homeowners who want to upgrade,” Liu said. “This was a leading cause of the 5% quarterly decline in repeat buyers, which contributed to the one percent decline in overall home sales. It shows that the housing market is not working for all homebuyers.”

Liu explained that while supply shortages continue to inflate home prices, first-time homebuyer demand has not diminished, and in fact has increased, because of the sense of urgency from rental and home price inflation.

“Increased supply of low down payment mortgage products has facilitated first-time homebuyers’ entry into the purchase market,” he said. “During the quarter, 78% of first-time homebuyers used a low-down payment product, an increase of 5% from a year ago.”

These homebuyers are increasingly utilizing low down payment options. The low down payment mortgages financed 467,000 sales to first-time buyers, the most loans in any quarter since the third quarter of 1999.

The private mortgage insurance industry insured a total of 181,000 loans for first-time homebuyers in the third quarter, the highest level since the second quarter of 2007 and up 19% from the third quarter last year.

In fact, this represented the fastest-growing source of credit to first-time homebuyers in the mortgage industry. And FHA loans saw a decrease, dropping 6% from last year to 197,000 FHA loans.

“First-time homebuyer growth is shifting the mortgage industry landscape in favor of the private sector,” Liu said. “The private mortgage insurance industry was again the fastest-growing source of credit enhancement for first-time homebuyers within the mortgage industry.”

“In contrast, the FHA program is beginning to contract,” he said. “These trends suggest that the private mortgage insurance industry will likely become the largest source of credit enhancement for the first-time homebuyer market soon, taking over from the FHA.”