Though conventional wisdom counted them out, first-time home buyers drove the housing market in March, posting a record high share, according to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions.
The survey found that 48.2 percent of March’s home purchase transactions were attributable to first-time homebuyers. This eclipsed the previous peak of 46.9 percent reached last October when the expected November expiration of the original homebuyer tax credit sent purchases by first-time homebuyers soaring.
The tax credit expiring in two weeks combined with the start of the spring home buying season appeared to play a major role in bringing out first-time homebuyers in large numbers.
“Many observers had felt that the pool of first time homebuyers had been depleted last fall, but this is turning out not to be the case. Instead, the normal spring-summer buying season is combining with the tax credit to produce blow-out results for first-time homebuyers.” commented Thomas Popik, research director for Campbell Surveys.
The surge in first-time homebuyer activity in March came at the same time the volume of distressed properties in the housing market climbed to over 50%, according to the Campbell/Inside Mortgage Finance survey. This was far above the low of 37.3 percent recorded in November, when a combination of government-mandated loan modification efforts and foreclosure moratoriums significantly reduced the inventory of distressed properties in the housing market.
First-time homebuyers were particularly attracted to what has turned out to be the most popular form of distressed property home sale transaction — short sales. The latest survey found that short sales accounted for 18.6% of the housing market in March.
“None of the survey results take into account the new Home Affordable Foreclosures Alternative (HAFA) program for short sales,” commented Popik. “This government program took effect in early April, so we expect short sales to account for an even greater proportion of the real estate market in coming months.”
The Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions surveys more than 1,500 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.