08/23/2010
First-time homebuyers continued to desert the housing market in July, according to a new industry study released Monday. Data compiled by Campbell Surveys and Inside Mortgage Finance, shows that first-time homebuyers accounted for only 39.1 percent of the home purchase market last month. That’s down from a peak of 48.2 percent as recently as March and the lowest level seen in at least a year.
“The end of the tax credit has clearly had an effect,” said Thomas Popik, research director for Campbell Surveys. “First-time homebuyer participation is continuing to drop.”
Popik’s research team says the share of first-time homebuyer activity could fall to as low as 30–35 percent of the market by the fall months. With homeowners continuing to fall behind on their mortgages, and more distressed properties coming onto the market, Popik says first-time homebuyers serve the function of soaking up this excess inventory.
In contrast, purchases by current homeowners have little positive effect on the housing inventory, because they usually sell a house at the same time they are buying another.
Short sales remain one of the few bright spots in the residential housing market. Time-on-market for short sales continued to decline, from an average of 20.5 weeks in February to 15.8 weeks in July, according to Campbell Surveys. First-time homebuyers made up a healthy 46.4 percent of short sale purchasers last month.
Campbell polls more than 3,000 real estate agents nationwide each month to evaluate trends in home sales and mortgage usage patterns.
