Low home prices and excess supply helped drive a rise in first-time U.S. home buyers and reduce excess inventory, according to a study released Saturday by The National Association of Realtors.
According to the survey, which was released at the 2008 Realtors Conference & Expo, the number of first-time buyers rose to 41 percent from 39 percent of all transactions in 2007.
“First-time buyers are much more flexible in entering the market because they aren’t concerned about selling an existing home,” National Association of Realtors Chief Economist Lawrence Yun said in a statement.
Yun attributed the increase to low home prices, “plentiful” supply and affordable interest rates. Looking ahead, Yun expects further increases in first-time home buyers because of a temporary first-time buyer tax credit and improvements to the FHA loan program.
“It’s been an optimal time for entry-level buyers with a long-term view,” Yun said.
According to the study, the median age of first-time buyers was 30, down from 31 in 2007.
The median income for a first-time buyer was $60,600 and typical first-time buyers bought homes costing $165,000.
Of first-time buyers who made a down payment, 69 percent used savings and 26 percent used money from a friend or relative. Another 7 percent received a loan from a relative or friend, while 16 percent used funds from their investments. A fixed-rate mortgage was chosen by 92 percent of those surveyed.
Looking at home sellers, the median age was 47 with income of $91,000. Three-quarters of respondents were married, lived in their home for six years and had their home on the market for eight weeks.
Results from the survey come from a questionnaire that NAR mailed to 133,000 home buyers and sellers nationwide who bought their homes between July 2007 and June.
source: msnbc.com
I can concur on the first time homebuyers being a large percentage, as they were the majority of my business last year. After reviewing the numbers though of the avg. of $165K, I realize that other agents out there have been probably having the same wo’s I have had this past year. Can also see it in our agent e-mails that go out trying to find properties, trying to get properties fixed, etc.. And it’s not that they won’t look themselves for their clients homes, they have exhausted the mls and branching out.
When people talk of the market is dead sometimes..I don’t think that’s the case and the numbers aren’t reflecting such. It’s not that we don’t have buyers that can’t get qualified as many think. They can get qualified, it’s just not for the amounts they’d like. We are just having a hard time finding buyers homes that will suffice them in their price range…this is the main problem I see. I have looked at over 60 homes with a client over last few weeks to no avail of finding the exact home. Client even begin to give up the 4 BR wish for a 3 BR.. We are out of inventory in our price range to view and just waiting for the right one to pop. And I don’t blame my client for not moving on many of the homes, most aren’t even habitable..no working heat and ac..water damage problems, etc. etc. etc..
Are other agents dealing with the same and how can we assist in finding more suitable affordable housing in what our clients see as “safe areas”? Any ideas?
Lisa
[...] time homebuyers on the increase Number of First-Time Home Buyers is IncreasingNovember 20, 2008 by Dee Anderson Low home prices and excess supply helped drive a rise in [...]