By Jed Smith, Managing Director, Quantitative Research
- As the data come in as part of the Realtors® Confidence Index survey we can increasingly see the impact of the first-time home buyer tax credit.
- NAR has tracked first-time buyers as a percentage of total market for a number of years. The number fluctuates, but is generally in the neighborhood of 40 percent, give or take a little.
- We have recently started to collect monthly data. The graph below shows participation by first-time buyers in recent months in the home market.
- From May onwards, with the exception of July, first-time buyers were well in excess of 40 percent of total buyers, finally reaching over 50 percent of a 6.1 million sales market in the October/November time frame in anticipation of the end of the tax credit.
- Previous NAR projections indicated that the tax credit would elicit an additional 350,000-400,000 sales from buyers who would otherwise not have been able to participate in the market. Subsequent data has shown that there was a substantial increase in the market (from 4.5 million annual sales in March ’09 to 6.1 million annual sales in October ‘09) and in first-time buyers (from a traditional 40% to 51% for October ’09).
Copyright National Association of REALTORS®, Reprinted with permission.
