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Category: Big Deals Current Grade: B+ Total Views: 389 Member Comments: 0 |
Posted on: 11/18/2009 Posted by: OpenDoorProperty Blog Points: 724 View all blogs >> |
Entry-Level Homebuyers Make Up Biggest Share Of Market Ever
First-time buyers made up a bigger share of the housing
market in 2009 than any other year on record, according
to a study released recently.
The number of first-time home buyers rose to 47% of all
home sales from 41% of transactions in last year’s study,
and was the highest on record dating back to 1981,
according to the Washington-based National Assn. of
Realtors.
Home sales have been fueled in recent months by cheap
foreclosure properties. Both investors and first-time buyers
have jumped into the market to snap up these heavily
discounted digs.
For first-time buyers, one major incentive fueling the spree
has been a tax credit extended last week by the Obama
administration and expanded to include move-up buyers.
The Realtors group lobbied heavily for the legislation. Paul
Bishop, vice president of research for the Realtors group,
said in a statement that several factors have been at play,
including the tax incentives.
Many independent economists, however, contend that the
credits are being given to people who would have bought
anyway.
Of those first-time buyers, 55% purchased their home with
a loan backed by the Federal Housing Administration.
That news comes on a day on which an independent audit
of the FHA’s finances shows that its cash reserves have
shrunk to a level below its legal limit, meaning that this pillar
of the recent housing market upswing might need a
taxpayer-funded bailout.
