Most housing markets across the country have been favoring home buyers for several years now, but first-time buyers are also beginning to see the benefits of the housing slump. I just read an interesting article at msnbc.com entitled, “First-time buyers benefit from housing slump“. According to this article, many markets across the US are now starting to become more attractive to first-time home buyers as well.
Due t the large quantity of foreclosure and bank-owned homes, many homes that were financially out of reach to first-time buyers just a year ago are now becoming more affordable for first-time buyers. According to the National Association of realtors, first time buyers accounted for 53% of all homes sold in the month of March of this year, usually first-time buyers only account for 40% or less of total home sales. The NAR also estimates that first-time buyers will continue to make up the majority of buyers throughout the end of the year.
So what has changed since last year has made conditions more favorable for first-time homebuyers? Well, according to this article, a few things. First and most obviously, the decline in home prices has now made many homes that were not affordable to first-time buyers, more affordable than they have been in a long time. Secondly and more importantly, federal tax credits to help first-time buyers are helping to encourage first-time buyers into finally taking that step towards home ownership. The IRS began giving $7,500 in tax credits last year and has since raised that credit to $8,000 or 10% of the total value of the home. The NAR estimates that thanks to this incentive, some 300,000 potential first-time buyers will finally buy their first home in 2009.
This is not good news for those who are thinking of selling their home in the future, but hopefully this will help to stimulate our slumping national market and help home prices to stabilize to historic levels.
Please click if you would like to read this article in its entirety at msnbc.com.