First-time buyers accounted for more than half of all home sales in March, with activity concentrated in lower price ranges. The downside is that because the sales are of foreclosed and other distressed homes it tend to drag down overall home prices across the USA. These properties typically sell for 20% less than traditional homes.
Economists tracking the beleaguered housing market say these first-time home buyers represent a critical demographic that could help lead the industry out of its fall by buying up much of the excess inventory of homes that is drawing down home values nationwide. The positive sign is the inventory of unsold homes is starting to diminish. Total housing inventory at the end of March fell 1.6% to 3.74 million existing homes for sale, which represents a 9.8-month supply at the current sales pace, compared with a 9.7-month supply in February.
The hope among housing experts is that interest in millions of such properties across the nation will rise because of low interest rates, a tax credit for first-time home buyers of up to $8,000, and home prices that have sunk in some markets by more than 20%. Distressed homes are moving fast because they often sell below market value.
USA Today
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