Pool of First-Time Homebuyers May Be Drying Up, Latest Campbell/Inside Mortgage Finance Survey Reveals
WASHINGTON (January 19, 2009) – First-time homebuyers, the most important segment of the home purchase market in 2009, were reducing their presence in the still-recovering U.S. housing market as last year drew to a close.
According to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions released today, first-time homebuyers accounted for 42.5 percent of home purchases in December. That was a noticeable drop from the 44.9 percent share first-time homebuyers commanded in November and way down from the 46.9 percent share recorded in October.
“Our survey statistics are showing that the pool of first-time homebuyers is starting to dry up,” said Thomas Popik, research director for the Campbell/Inside Mortgage Finance Survey. “Despite the extension of the tax credit by Congress, we see that participation of first-time homebuyers peaked in October and has been declining ever since.”
Meanwhile, investors, many of whom had previously opted out of bidding competitions with first-time homebuyers for lower priced properties in the fall, stepped up their home purchases last month. The closely-watched tracking survey found that investors boosted their share of home purchases from 13.7 percent in November to 16.9 percent in December.
The percentage of current or trade-up homebuyers in the home purchase market remained largely unchanged between November and December, going from 41.4 to 40.6 percent.
The increase in investor activity during December was at least partially attributable to the Christmas holiday and the fact that both first-time and current homebuyers appeared to take a seasonal break from house shopping. The extension of the homebuyer tax credit until April also appears to have taken pressure off first-time homebuyers to move quickly.
Another factor impacting the change in homebuyer mix last month was an increase in distressed property activity. The latest survey found the share of distressed property home purchases jumped from 37.3 percent in November to 39.3 percent in December. Investors tend to purchase distressed properties.
The Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions polls more than 1,500 real estate agents nationwide and provides up-to-date intelligence on home sales and mortgage usage patterns.
For more information on the survey contact: John Campbell at Campbell Surveys, (202) 363-2069, firstname.lastname@example.org.