First Time Homebuyer Traffic Plunged in May
Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions reports that homebuyer declined in May, as would be expected with the end of the latest federal home purchase tax credit. The most dramatic drop was with first time homebuyers, which was the category that led in home purchases the past several months.
First time homebuyers averaged 45% of the purchases for the past three months, while existing home owners made an average of 37% of the purchases and investors have been holding steady at about 18%.
The implication is that the most active buyer segment for homes may be drying up after two rounds of federal tax credits. The exception is in California where first time homebuyer traffic remain higher than the rest of the country, although lower than April, apparently due to the start of a $10,000 state income tax credit for first time homebuyers in that state on May 1.