Homebuyers Began Exodus from Housing Market
In April, Latest Campbell/Inside Mortgage Finance Survey Reveals
WASHINGTON DC (May 24) –
First-time homebuyers started to desert the housing market in April,
ahead of expectations, according to the latest Campbell/Inside Mortgage
Finance Monthly Survey of Real Estate Market Conditions.
closely-watched survey found that 43.4% of April’s home purchase
transactions were attributable to first-time homebuyers, a significant
drop from March’s figure of a huge 48.2%. For the winter months of
January to March, first-time homebuyer participation had been growing at
a rapid clip; April’s data represents a clear reversal in the trend.
Although first-time homebuyers had until April 30 to sign a home
purchase contract (and close by June 30) to qualify for an $8,000 tax
credit, the new survey results show that first-time homebuyers were
reducing their activity even before hitting that deadline.
“We were surprised to see the early decline in first-time homebuyer
commented Thomas Popik, research director for Campbell Surveys.
“When the tax credit was expected to expire last November, we saw a peak
of first-time homebuyers in October. Now the first-time homebuyer peak
appears to have occurred not one month, but two months early.”
Importantly, the survey results revealed that existing or current homeowners picked up the
slack from first-time homebuyers, expanding their share of the home
purchase market from 33.5% in March to 38.7% in April. Current
homeowners qualify for as much as a $6,500 tax credit that also expired
April 30 for purchase contracts.
Separately, the proportion of damaged foreclosed properties or so-called
real estate owned (REO) sold during April plunged. Damaged REO accounted
for 15.4% of transactions in March, but only 12.8% in April. One reason
for the drop in damaged REO may be increasing numbers of short sales.
sales – where the home is sold for less than the mortgage amount
outstanding and with lender approval – represent a way to resolve
homeowners in default without going through the foreclosure process.
Short sales were the largest portion of the distressed property housing
market in April with 17.9%, the survey found.
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.
For more information
on the survey contact: John Campbell at Campbell Surveys, (202)