Many First-Timers Considering Buying a Home This Spring
In a survey for Century 21 Real Estate fielded earlier this month among prospective first time home buyers who indicated they were likely to purchase a home in the next two years, a majority — 78% — said that now is a good time to buy a home, despite widespread concern about the economy. Of those responding to the online poll, 68% said that now is a better time to buy than six months ago.
Prices emerged in the online survey as the primary driving force for prospective first-time buyers, with 85% saying they consider current homes prices affordable and 73% saying that taking advantage of current pricing would be a major factor in their decision to buy.
However, potential first-time buyers are still split between “being willing to consider an offer now” (42%) and “waiting for prices to go down before they seriously consider making a purchase” (48%).
“Current pricing, rates and incentives — such as the first time home buyer tax credit — provide tremendous opportunities for first-time home buyers to get into the market,” said Tom Kunz, the president and CEO of Century 21.
“Our research shows that while consumers still have concerns about the future of the economy, many are actively considering their options as we move into the spring selling season,” he said.
More than three-quarters of those polled — 77% — said they are more likely to buy a home in the next six months because of the $8,000 first-time buyer credit.
Perceptions about the residential mortgage market remain a key concern for potential first-time home buyers, the survey found.
Seventy-two percent considered current mortgage rates affordable and 62% recognized that rates are lower than they were a year ago. However, 75% said they believe it is difficult to get a home loan right now and 74% think it is harder to get a loan than the same time last year.
“Traditional mortgage investors, Fannie Mae, Freddie Mac, FHA and VA are receiving significant financial backing from the federal government, keeping interest rates low and mortgage funds available for qualified buyers,” said Marshall Gayden, senior vice president of Century 21 Mortgage.
“Home buyers who have a stable job history of at least two years, solid credit (620 and above) and downpayment money that can be documented (3.5% on FHA loans) are well positioned to secure a mortgage in today’s credit environment,” Gayden said.
Prospective first-time buyers also indicated that there is a real need for someone who can provide accurate and reliable information while they look for a home. When asked about the real estate transaction process, more than half — 59% — of potential buyers rated their understanding of the process as only “fair” or “poor.”
“Between home loans and the closing process and understanding the new government stimulus, real estate professionals play a vital role in working with first-time home buyers to help them navigate the current market,” said Kunz.
Among other key findings of the survey:
- Bargains in the marketplace are providing additional options for buyers to consider. Fifty-six percent of potential first-time home buyers are considering purchasing a foreclosed or short sale home, and 63% are open to purchasing either a “fixer-upper” or “as-is” home.
- When asked to rate the features that they look for when choosing a home, price is the primary consideration, with 87% saying it is “very important,” followed closely by neighborhood safety (80%) and the condition of the home (71%).
- Having enough money for a downpayment is a top concern, with 46% saying they are “very worried” about the issue.
- Most respondents — 86% — reported being in the market for single-family homes.
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.
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