The tumultuous U.S. housing market hasn’t been a turnoff for first-time buyers. Sales to first-time homebuyers are at the highest point in seven years, according to a new nationwide survey.
Homebuyers are taking longer to find a house than they did in previous years and are making larger down payments, the study by the National Association of Realtors found. And high energy costs are affecting their choice of home and commuting distance.
More than 40 percent of homes sold went to first-time buyers, the survey of 10,000 recent buyers found.
“That increase certainly makes sense, because first-time buyers are least encumbered with the sale of an existing home and can take advantage of the housing market,” said Paul Bishop, a top researcher with the National Association of Realtors. The group held its annual meeting in Florida over the weekend.
Almost 90 percent of recent buyers said they thought a house was a good financial investment.
More than 30 percent of the buyers surveyed said they went ahead with a purchase because they thought homes were priced affordably, there were lots of properties to choose from and financing terms were good.
Only 4 percent said they wished they had waited to buy a house.
These results come at a time when home prices in most U.S. markets are falling and inventories of houses on the market are high.
Maybe that’s why buyers are taking longer to close a deal. The average home shopper spent 10 weeks perusing the market before selecting a property, according to the survey, which was based on a year’s worth of sales as of June 30.
A record number of buyers – 32 percent – found their houses first on the Internet, according to the association. That’s fast approaching the number, 34 percent, who first identified their purchase directly through a real estate agent.
At some point, almost 90 percent of homebuyers looked for information on the Internet during their search for a home, Mr. Bishop said.
When they find a house to buy, consumers have to work harder to do the deal. Only 23 percent of buyers said they were able to get 100 percent financing for their houses. And researchers for the Realtors group say the number of buyers who make no down payments is much, much lower than in the past.
“That has been affected quite substantially over the more recent months by what is going on in the financial markets,” Mr. Bishop said.
More than a quarter of buyers said getting a loan turned out to be more difficult than they expected.
And almost 50 percent of recent buyers said they had to make some lifestyle sacrifices to buy a house.
Buyers are also finding deals. More than 40 percent of home sellers said they had to offer special incentives to attract buyers. “The most common types of incentives were assistance with closing costs and home warranty policies,” Mr. Bishop said.
For the first time in such surveys, the rising costs of gasoline and utilities are affecting how consumers look at housing. Almost 80 percent of recent homebuyers said they were concerned about commuting costs when they made their purchase.
“The survey was conducted in August, and energy prices were very high and in everyone’s mind at that point,” Mr. Bishop said. About 43 percent of buyers said heating and cooling costs were very important factors when they selected their homes.
Source: Dallas Morning News