Skip to content

Housing Market Continues to See First-Time Buyer Exodus

August 24, 2010

Housing Market Continues to See First-Time Buyer Exodus
08/23/2010 By: Carrie Bay

First-time homebuyers continued to desert the housing market in July, according to a new industry study released Monday.

Data compiled by Campbell Surveys and Inside Mortgage Finance, shows that first-time homebuyers accounted for only 39.1 percent of the home purchase market last month. That’s down from a peak of 48.2 percent as recently as March and the lowest level seen in at least a year.

“The end of the tax credit has clearly had an effect,” said Thomas Popik, research director for Campbell Surveys. “First-time homebuyer participation is continuing to drop.”

Popik’s research team says the share of first-time homebuyer activity could fall to as low as 30-35 percent of the market by the fall months.

With homeowners continuing to fall behind on their mortgages, and more distressed properties coming onto the
market, Popik says first-time homebuyers serve the function of soaking up this excess inventory.

In contrast, purchases by current homeowners have little positive effect on the housing inventory, because they usually sell a house at the same time they are buying another.

Short sales remain one of the few bright spots in the residential housing market. Time-on-market for short sales continued to decline, from an average of 20.5 weeks in February to 15.8 weeks in July, according to Campbell Surveys. First-time homebuyers made up a healthy 46.4 percent of short sale purchasers last month.

Campbell polls more than 3,000 real estate agents nationwide each month to evaluate trends in home sales and mortgage usage patterns.

The company says while fewer first-time homebuyers in the housing market will likely put downward pressure on home prices in the late summer and fall, in the near-term, real estate agents are reporting stable prices overall for the month of July and rising prices for non-distressed properties.

One real estate agent in Florida predicted, “Non-distressed property pricing is rising too quickly. Anticipated REOs coming on the market will impact this pricing by the end of September.”

Another agent in Iowa commented, “Once the ‘free’ money [from the federal tax credit] was over, the market began to die. The sales that would have normally taken place over the summer took place in March and April to get the money. The residential market is dying-prices are gradually falling.”

From: http://ping.fm/xg8rx

From → Uncategorized

Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: