Seven months after the first-time homebuyer tax credit expired, first-time buyers registered a surprisingly strong share of housing markets across the country, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
Sales to first-time homebuyers accounted for 37.7 percent of all transactions tracked in December, up from the 34.4 percent level found by the Campbell survey in the months of September and October.
In a monthly survey of its members, the National Association of Realtors also reported a slight uptick in the first-timer market share in December, to 33 percent of homes in December from 32 percent in November, October and September. First-time buyer market share reached a high of 43 percent in December 2009, shortly after Congress extended the credit through April 2010, and reached a low of 31 percent in August 2010.
The Campbell survey said fears of rising interest rates prompted first-time homebuyers to get off the fence and buy before another burst of interest rate-increases.
NAR also reported that sales in December rose 12.3 percent to a seasonally adjusted annual rate of 5.28 million in December from an upwardly revised 4.70 million in November, but remained 2.9 percent below the 5.44 million pace in December 2009.
The normal seasonal pattern is for existing home sales to be nearly flat between the months of November and December. However, in 2010 existing home sales rose 13.8 percent between November and December, while falling 2.2 percent over the same two months back in 2009, Campbell Surveys said.
“The combination of increased property supply and growing homebuyer demand caused a blow-out month for home sales,” commented Thomas Popik, research director for Campbell Surveys. “We knew this was coming because average transactions for our survey respondents rose from 2.9 in November to 3.4 in December.”
Campbell Surveys predicts the surge in home buying may not last. “January and February are typically the slowest months of the year for home buying,” explained Popik. “And we’ll still have a backlog of foreclosed homes coming on the market during the winter, so prices may come under pressure, too.”
The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey involves more than 3,000 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.