Despite rumors to the contrary, first-time buyers are alive and kicking, buying houses at virtually the same pace as they were before the first-time homebuyers credit first stimulated demand two years ago.

For the first seven months of this year, the first-time buyer market share has been remarkably steady, ranging from 32 to 36 percent of existing home sales through the spring and summer buying season, according to the National Association of REALTORS® monthly survey of 1300 members.

The Campbell/Inside Mortgage Finance survey, also a survey of real estate brokers, found that the first-timer market share has fluctuated 35 percent in January to 37.7 percent in August. In the Campbell survey, the first-time homebuyer share of short sales hit a peak of 54.1 percent of all short sale transactions in November 2009, just before the originally-scheduled expiration of the federal homebuyer tax credit.

Today’s 32 to 38 percent range is not far below the 40 percent market share first-time buyers enjoyed in 2003 and 2004, before the boom drove prices out of reach of man or the tax credit created an artificial, temporary demand.

Even though first-timers are saddled with higher down payments, tougher credit requirements and mortgage approval delays, those are not the deal killers that they are often thought to be.

Today’s first-timers have found several ways to deal with higher down payment requirements. FHA’s 3.5 percent down market share has risen from 3 to 30 percent since 2006, and even with tighter credit standards and higher fees that took effect a year ago, FHA remains the financing of choice for most first time buyers. Many have also discovered the no down payment USGA guaranteed loan program, which also recently raised fees, but has $12 billion a year to guarantee loans. Today’s credit requirements and documentation are not much tougher than they were 20 years ago.

In fact, today’s all-time low rates—once-in-a-generation prices 30 percent below levels of four years ago and inventories of distress sales discounted below market values in every market—should herald a First-time Buyer Golden Age. Moreover, rents are rising and rental choices are dwindling as vacancy rates rise.

If you are looking to buy your first home, give me a call (505) 259-2757, I would love to help!

Joe Jenkins

Associate Broker

Coldwell Banker Legacy