First-time buyers purchased 46% of existing home sales in May, down from 49% in April.
We all knew that first-time home buyers activity was going to fade after the tax credit expired. But there was not much of a way to quantify exactly what the impact would be beforehand. We could wait for subsequent monthly sales data to reflect that weakness — but that is hardly much of a solution.
Enter the Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions, a proprietary survey of 1,500 real estate agents nationwide.
The results of the first survey are out, and not surprisingly, it indicates that first-time “homebuyer traffic dropped sharply in May. This drop implies fewer signed contracts in June and fewer closed transactions in July and August.”
Given its fiscal condition, one wouldn’t imagine California could afford its own own first-time home buyers tax break, but somehow, they came up with one. California enacted its own $10,000 credit on May 1 — the day after the federal tax credit expired.
Not surprisingly, Cali fared better than the rest country in terms of first-time home buyer activity. As the chart below shows, California’s first-time homebuyer traffic did much better than the rest of the nation:
First-Time Homebuyer Traffic Took Nose-Dive in May
Campbell/Inside Mortgage Finance Survey, June 21, 2010
Home buyer Traffic Tumbled in May as First-Time Shopping Stalled (PDF)