Existing Homebuyers Step Up Home Purchases in November, Latest Campbell/Inside Mortgage Finance Survey Reveals
WASHINGTON, DC (December 21, 2009) – Existing homeowners, who had been sitting on the home buying sidelines for much of this year, stepped up their home purchases in November, according to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions.
The increase in home buying by current homeowners came at the same time that both first-time homebuyers and investors reduced their activity, the report for November transactions indicated.
The latest monthly tracking survey showed that existing homeowners accounted for a very healthy 41% of home purchase transactions in November, a sharp increase from their 38% of transactions in October. Meanwhile, the proportion of home purchases tied to first-time homebuyers slipped from 47% in October to 45% in November. Investors also saw their share of reported home purchases drop, falling from 15% in October to 14% in November.
“Our survey statistics are showing the effect of Congress’s delay in extending the homebuyer tax credit and then its eventual extension,” said Thomas Popik, research director for the Campbell/Inside Mortgage Finance Survey. “The first-time homebuyers started to lose interest in October when it appeared that Congress wouldn’t extend the credit. When the credit was finally extended in early November, current homeowners jumped at the new opportunity for a tax credit on their home purchases.”
Prior to passage of the law’s revision on November 6, the $8,000 tax credit applied only to first-time homebuyers who closed transactions before December 1. When Congress extended that tax credit until April of 2010, it also added a $6,500 credit for current homeowners who purchased a new primary residence.
“The extension of the first-timer tax credit has caused the first-timer buyer pool to remain about the same,” reported one real estate agent survey respondent in commenting about November’s activity. “The addition of the lower credit for current homeowners under certain circumstances has brought more of them into the market to test the waters.”
Another factor impacting the change in homebuyer mix last month was an increase in non-distressed property activity. The latest survey found the share of non-distressed property home purchases jumped from 58 percent in October to 63 percent in November. Existing homeowners tend to purchase non-distressed properties.
The Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions involves 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.