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Survey: First-Time Home Buyer Participation Hits 4-Year High

June 22, 2015--Sorohan, Mike
Sales-to-list price ratios, average number of offers and average time on market held strong in May, helped by increased activity of first-time home buyers, the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

The survey said first-time home buyer participation reached a four-year high in May. “First-time homebuyers are driving the market,” said Tom Popik, research director for Campbell Surveys.

First-time homebuyers accounted for 38.8 percent of purchases in May, on a three-month moving average. The first-time homebuyer share was last at that level in August 2010 and was at 35.9 percent in May 2014.

Popik noted lower costs for FHA mortgages have helped increase purchase activity by first-time home buyers. Concurrently, he said, investors have reduced their share of home purchases, with many looking to cash out as home prices remain elevated.

The report said sales-to-list price ratios on non-distressed properties increased sharply for the third consecutive month, hitting 98.1 percent in May, above the 97.6 percent reading a year ago. The average number of offers for non-distressed properties also continued to rise, with an average of 2.2 offers in May, up from an average of 2.1 a year ago. Average time on market for non-distressed properties sold in May fell to 9.4 weeks, a third consecutive monthly decline.

Popik said while homebuyer traffic was stronger this spring than a year ago, real estate agents in many areas caution of a lack of homes for sale. He said some potential sellers remain in a negative equity position and many others that would consider putting their homes for sale haven’t found a suitable home to purchase.

“This has created a ‘gridlock’ situation where potential home sellers don’t place homes on market for fear they won’t find another home to buy,” Popik said.

This Week:
• Monday: Chicago Fed National Activity Index; Existing Home Sales

• Tuesday: Durable Goods Orders; FHFA House Price Index; PMI Manufacturing Index Flash; New Home Sales; Richmond Fed Manufacturing Index

• Wednesday: MBA Weekly Applications Survey; Corporate Profits

• Thursday: Jobless Claims; Personal Income/Outlays; Kansas City Fed Manufacturing Index

• Friday: U. of Mich. Consumer Confidence (final); U. of Mich. Inflation Expectations (final)