Altadena Real Estate

First-Time Home Buyers Lead Demand

Nearly 80% of Americans don’t expect to buy a home in the next five years, but more than half of those that do plan to buy this year would be first-time home buyers. That’s according to a survey commissioned by operator Move Inc (“Move”).

A crackdown on mortgage fraud, lower interest rates, and tax breaks for first-time home buyers were seen as the 3 most important factors to stabilizing housing markets among 1,005 adults surveyed by OmniTel on behalf of Move from March 6-8.

Although 23% said they planned to buy a home in the next 5 years, only 5.8% said they expected to complete that purchase within the next 12 months. About 7% said they planned to purchase a home in 1 to 2 years, and 11% planned to purchase within 2-5 years.

More than half of those planning to buy in the next 12 months would be first-time home buyers (53.5%), which compares to the 41% market share actually taken by first-time home buyers in 2008, according to the National Association of Realtors.

“It’s not all doom and gloom. We found Americans are optimistic about home ownership despite concerns,” said Move CEO Steve Berkowitz in a press release detailing the survey results. Move said the survey demonstrates the housing downturn “has created significant demand for homeownership especially among first-time homebuyers.”

The National Assocation of Realtors reported Monday that sales of existing homes rose 5.1% from January to February, with distressed sales accounting for 40-45% of transactions.

Bottom line…pent-up demand for housing should lead to an increase in sales and a corresponding stabilization of prices. As I mentioned in a recent post, Steve and I are witnessing this first-hand: open house traffic and the number of offers written has jumped dramatically over the last month.

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