The National Association of Realtors (NAR) have released a study which shows first-time buyers have risen in market share and plan to own their homes longer than other buyers in previous surveys.
According to the NAR study the average age of firs-time buyers was 30 and the median income was $60,600. The typical first-time buyer purchased a home costing $165,000 and plans to stay in that home for 10 years.
The average down payment by first-time buyers was 4 per cent of the property price and the number purchasing without a deposit declined from 45 per cent in 2007 to 34 per cent in this research of first time buyers who made a down payment, 69 per cent used savings and 26 per cent received a gift from a friend or relative, typically from their parents.
Lawrence Yun, chief economist at NAR said,
“First time buyers are much more flexible in entering the market because they aren’t concerned about selling an existing home.
“Given low home prices, plentiful supply and affordable interest rates, it’s been an optimal time for entry-level buyers with a long term view.
“The study covers transactions through the middle of 2008, so we can assume the down payment numbers have shifted recently because credit tightened and no-down payment loans all but disappeared around the close of the survey.
“Considering the temporary first-time buyer tax credit and improvements to the FHA loan program, we expect stronger entry-level activity as the floor of credit improves- that, in turn, should free more existing owners to make a trade in 2009.”
The National Association of Realtors is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.