Interest from first-time homebuyers is steadily growing due to concerns over rising interest rates and prices, while investor interest in buying remains strong, according to results from the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
The survey found first-time homebuyers accounted for 34.5 percent of home purchase transactions in February, leading to the second monthly increase. In December, activity from first-time homebuyers hit a four-year survey low of 32.9 percent.
In addition, the HousingPulse index measuring homebuyer traffic showed first-time homebuyer traffic spiked to a four-year survey high of 66.4 percent in February. An index score above 50 percent reflects an increase in home shopping traffic.
“First-time homebuyers are the wildcard in the upcoming spring-summer homebuying season,” said Thomas Popik, research director for Campbell Surveys. “We see strong first-time homebuyer traffic, but it’s still not clear that the traffic will translate into increased purchases, because first-time homebuyers are dependent on low-downpayment financing, such as FHA mortgages, and announced FHA program changes will take effect this spring.”
Meanwhile, investor purchases reached a four-month high after accounting for 34.5 percent of transactions in February, according to the survey results. Traffic from investors also increased, rising to 70.7 percent in February from 68.6 percent in January.
At the same time, the survey’s distressed property index, which measures the share of home purchases involving foreclosed properties or short sales, rose to a four-month high of 36.2 percent.
On the other hand, purchase activity from current homeowners fell to the lowest level since last June to 42.5 percent in February.
However, activity from current homeowners may be revived in the spring buying season. The HousingPulsetraffic index for current homeowners reached a four-year high of 66.4 percent in February compared to 52.7 percent in December.
by Esther Cho