First-Time Homebuyers Tax Credit Results In 357,000 Additional Home Sales To Date
WASHINGTON, DC (Sept. 22, 2009) --- The first-time homebuyers tax credit has resulted in 357,000 incremental home sales so far in 2009, according to a newly released estimate by Campbell Surveys. The estimate is based on findings from four national surveys of real estate agents conducted by Campbell Surveys this year.
For the first six weeks of 2009, before the passage of the American Recovery and Reinvestment Act on February 17, first-time homebuyers accounted for 32% of home sales. In the intervening months since the passage of the act, first-time homebuyers have accounted for 43% of home sales. Using a straightforward and transparent estimation methodology, Campbell Surveys arrived at the figure of 357,000 incremental first-time homebuyers due to the tax credit.
During the last two weeks of February 2009, Campbell Surveys had surveyed real estate agents on the proportion of their transactions accounted for by first-time homebuyers in the months of January and February, arriving at a figure of 32%. Campbell Surveys again surveyed real estate agents at the end of June for the months of April, May, and June, arriving at a figure of 43%. Using a monthly tracking survey, Campbell Surveys subsequently polled for the months of July and August, arriving at figures of 42% and 43%, respectively.
"Our methodology to estimate the incremental sales to first-time homebuyers was quite simple," explained Thomas Popik, research director for Campbell Surveys. "We used the difference in the proportion of first-time homebuyers before and after the passage of the first-time home buyer tax credit. In February, before the law was passed, the proportion of first-time homebuyers was 32%. For the remainder of the year the percentage of first-time homebuyers has been nearly constant at 43%. We then multiplied the incremental percentage of first-time homebuyers by the number of existing home sales and new home sales as reported by the National Association of Realtors and the U.S. Census Bureau. Interestingly, our resulting estimate of 357,000 incremental sales due to the first-time homebuyer tax credit, for the period March through mid-September, is nearly identical to the NAR estimate and also in the same range as the Moody's economy.com estimate."
The National Association of Realtors used a survey of their members to estimate an incremental 350,000 first-time homebuyers due to the tax credit. Economists at Moody's economy.com, using a separate estimation methodology, arrived at a figure of 400,000 incremental first-time homebuyers.
Campbell Surveys is a part of Campbell Communications, Inc., a marketing and research firm based in Washington. Its surveys for the mortgage industry are sponsored by Inside Mortgage Finance, a leading industry newsletter.
Campbell Surveys has characterized the behavior of first-time homebuyers in a number of additional dimensions, including the type of properties that they commonly buy and the method of financing used. A majority of first-time homebuyers purchase move-in ready foreclosed properties or short sale properties. FHA loans are the predominant means of financing for first-time homebuyers. Due to a lack of mortgage financing options, first-time homebuyers rarely purchase foreclosed properties with significant damage. Non-distressed properties sold at higher price points are a market segment also largely shunned by first-time homebuyers.
The first-time home buyer tax credit was retroactive to home purchases on or after Jan. 1, 2009 and will extend to purchases until Nov. 30, 2009. Campbell Surveys estimates approximately 1.6 million first-time homebuyers from January to mid-September and approximately 2 million in total through expiration of the tax credit.
An Excel spreadsheet showing the Campbell Surveys estimation methodology is attached to this news release.
Campbell Surveys will conduct a telephone news conference to discuss survey results on distressed properties and first-time homebuyers on Tuesday, Sept. 22, at 11 a.m. Thomas Popik, research director for Campbell Surveys, will be available to discuss the survey results and answer questions. Contact John Campbell for the news conference dial-in number and passcode.
CONTACT: John Campbell, (202) 363-2069, firstname.lastname@example.org