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Last week’s existing home sales data for April contained a bit of a surprise buried in the release: First time buyers made up 33% of sales during the month, the largest share since January 2021 and higher than 29% in the year-earlier period.

“First-time buyers are likely succeeding now because there is slightly less competition when mortgage rates are higher,” Jessica Lautz, deputy chief economist and vice president of research, told Yahoo Finance in an email. “While this does restrict housing affordability and who can purchase, buyers who are able to purchase at higher incomes are finding the chance to do so.”

Indeed, last week, executives at Toll Brothers, which bills itself as a luxury builder, said on its quarterly earnings call that 30% of their customers were first-time buyers, reflecting “the financial strength and affluence of our entire customer base.”

“Most of these buyers are millennials, many of whom have waited later in life to form families and have accumulated greater wealth when they buy their first home,”Douglas Yearley, CEO of Toll Brothers, told investors and analysts on their second quarter earnings call. “Some benefit from the greatest transfer in US history from boomer parents who want to see their kids enjoy the fruits of their success and help them financially.”

At first glance the uptick may seem counterintuitive, as first-time buyers shopping at a lower price point should be more rate and price sensitive — and rates are hovering near 7% while home prices are hitting all-time highs.

But it appears that within this group of prospective homeowners, those who can afford homes right now are taking the leap and buying them.

John Lovallo, an analyst at UBS covering homebuilders and building products, told Yahoo Finance some first-time buyers today are better financed than previous generations and largely motivated by necessity rather than rate-shocks.

“We believe that first time home buyers are becoming a more important driver of demand for the homebuilders in our coverage as Millennials and Gen Z reach prime homebuying age,” Lovallo said. “Therefore, to the extent they can buy, they will, which arguably makes this cohort less rate sensitive.”