First-Time Homebuyers Begin to Stimulate Economic Recovery
November 19, 2009 - According to a NAR survey released last week at the Realtors® Conference and Expo in San Diego, California, first-time homebuyers now account for nearly half of all home sales. Rising to 47%, a jump from the 41% recorded in last year's study, first-time buyers have reached the highest market share documented during the past year.
"These [first-time] buyers are critical to housing and a general economic recovery because the market always heals from the bottom up," NAR research vice president, Paul Bishop affirmed. "It's interesting to note that the last cyclical peak of first-time homebuyers was during the last noteworthy economic downturn, with the first-time buyers starting the chain reaction that led the nation out of the recession."
A NAR forecast predicts for existing-home sales to rise to 5.69 million in 2010, a 13.6% increase from the 5.01 million expected this year. Lawrence Yun, NAR chief economist, believes that these projections are enhanced by the recent tax credit extension and expansion. He states, "We are hopeful about the impact of the expanded tax credit because it will stabilize home prices. In fact - it now looks like we'll have 2.3 to 2.4 million first-time buyers this year, which is better than first projected."
Additionally, NAR's housing affordability index will hit a record breaking level for 2009. Though homes are unlikely to be as affordable as the present year, prices are expected to remain historically low for buyers throughout 2010.