Tax Credit Spurs First-Time Home Buyers, Survey Finds
Of the households participating in a Move, Inc. telephone survey earlier this month who said they plan to buy a home this year, 18.1% indicated that they would be doing so in order to take advantage of the $8,000 first-time home buyer tax credit in the stimulus package enacted in February.
The survey found that the housing downturn, which is now entering its third year, has created significant demand for homeownership, especially among first-time buyers. In all, 23% of those surveyed said they plan to purchase a home in the next five years, and more than half of them (53.5%) would be first-time buyers. By comparison, 41% of home buyers in 2008 were purchasing for the first time, according to the National Association of Realtors®.
Of those polled, 5.8% said they planned to purchase a home in the next 12 months, 12.8% said they expected to buy within two years and 11% were looking at a two- to five-year horizon for their home purchase.
Although the survey found that the $8,000 credit has apparently motivated a significant number of households to seek to close on a first home before the incentive expires at the end of November, nearly half of the respondents (47.6%) reported that they did not know about the credit and 29.3% said that it wasn’t large enough to get them to act right now.
Potential home buyers with higher incomes are more interested in the tax credit than those in lower income brackets, Move found, with 43.4% of first-timers earning $50,000 or more saying they planned to use the tax credit.
More than half (52%) of those responding to the survey said they were concerned that they or someone they know will face foreclosure in the next six to 12 months. As a reason for the foreclosure, 27.1% cited recent unemployment, 29.3% future unemployment and 25.6% because more is owed on the home than it’s worth.
Ranked as the top three solutions for stabilizing the housing market were: cracking down on mortgage fraud (cited by 56.9% of those in the poll), lowering interest rates (51.6%) and giving first-time home buyers tax breaks as incentives to buy (43.5%).
Opinion was fairly evenly split over whether the government is doing enough to stabilize the housing market; 46.2% said “yes” and 43.8% indicated “no.”
The Move survey found that nearly one out of five home owners (18.9%) plans to take advantage of the Administration’s new program to help prevent foreclosures.
“It’s not all doom and gloom,” said Steve Berkowitz, Move’s CEO. “We found Americans are optimistic about homeownership despite concerns. They’re doing everything they can — from reducing discretionary spending to pay their mortgages, to planning to take advantage of the Administration’s new program to stop foreclosures. They’re also working with lenders to modify loans. Even more impactful are numbers that show interest in homeownership is strong, as nearly a quarter of all adults plan to buy a home in the next five years.”
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit – including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Available Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
Plan to Attend Construction Forecast Conference
Plan to attend or watch the 2009 Spring NAHB Construction Forecast Conference & Webcast on Thursday, April 23 in Washington, D.C. to get the latest facts, insights and analysis of the housing industry.
Panels of nationally recognized experts at the day-long conference will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
For more information and to register, visit www.nahb.org/cfc.
Want to Know the Housing Starts Through 2017?
Find out in HousingEconomics.com's Long-Term Forecast.
Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more.
To learn more, visit www.housingeconomics.com.