First time buyers keep housing market on life support
In the midst of a dreary housing market, first time home buyer sales remains a bright spot
In the midst of all the depressing statistics on home sales, there is one bright spot: first time home buyer programs activity.
Statistics from the census bureau show that 159,000 new houses priced $400,000 or greater sold in 2007. By 2010, that number had dropped to a mere 45,000, or a drop of 71% over a three year period.
The same report shows that 106,000 new houses priced $150,000 or lower sold in 2007. By 2010, that number had dropped to 55,000. that's still a significant drop, but not nearly as severe as upper end homes.
Looking at the numbers another way, in 2007, new homes priced over $400,000 outsold new homes priced under $150,000 by nearly 50%. Just 3 years later, first time buyers overtook high end buyers as new homes priced under $150,000 outsold new homes priced over $400,000 by 20%.
Nobody is forecasting a sudden burst of home-buying activity this year, yet builders and agents alike are holding a "cautious optimism" that new home sales might begin to finally improve.
that might prove to be more blind hope rather than grounded reality, in light of the fact that the first time home buyer tax credit expired last year.
By themselves, first time buyer sales are not enough to revive an ailing housing market, but they certainly are keeping new home sales on life support.
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