Record Share of First Time Homebuyers

November 15 2010 (Shirley Allen)
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The National Association of Realtors (NAR) reports that first time homebuyers accounted for half of all home sales from July 2009 through June 2010 according to a survey it conducted of buyers and sellers.

First time home buyers responding to the survey made up 50 percent of sales in 2010 up from 47 percent in 2009. That’s the highest share of first time homebuyers in the history of the survey that goes back all the way to 1981.

The survey is based upon 8,449 responses to a survey sent to homebuyers and sellers nationwide whose transactions took place between July 2009 and June 2010.

The survey also found home buyers today have affirmed a long-term view of home ownership, the typical seller is experiencing positive returns and the vast majority of home owners see their property as a good investment.

In last year’s survey, the typical seller had been in their home for seven years, in the 2010 survey that number had increased to eight years. First time buyers claimed they planned to stay in their homes for 10 years and repeat buyers planned on holding on to their property for 15 years.

One of the more interesting revelations of the survey found that even with several years of price declines, the typical seller who purchased a home eight years ago experienced a median equity gain of $33,000, a 24 percent increase, while sellers who were in their homes for 11 to 15 years saw a median gain of 40 percent.

The practice of “flipping” in today’s market was found to be virtually non-existent with the exception of experienced investors.

The survey found that the single biggest reason most people buy a home is the simple desire to own a home of their own, cited by 31 percent of respondents, including 53 percent of first-time buyers.

The next biggest reasons for buying, identified by all home buyers, were desire for a larger home, 9 percent; a change in family situation and the home buyer tax credit, cited by 8 percent each; a job-related move, 7 percent; and the affordability of homes, 6 percent.

Tags: NAR, first time home buyers, home buyers, home ownership, good investment, equity, flipping, investors