First-time buyers finding some deals

04.26.09
By Timothy Jones

Although overall existing home sales were lower than usual last month, the National Association of Realtors noted that more first-time buyers are easing into the housing market.

First-time home purchases made up more than half (53 percent) of all transactions during March, according to an NAR survey.

The group's chief economist Lawrence Yun said that a combination of government incentives and good deals on home loans had drawn more buyers into the market.

"Buyer traffic has been rising and real estate offices are getting phone inquiries about the tax credit," he explained. "By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions."

Figures from Freddie Mac indicate that the average rate for a 30-year fixed-rate mortgage was a record low of 5 percent in March. Prospective borrowers with high credit scores are likely to have access to the best deals.

Total existing-home sales fell by 3 percent between February and March and were 7 percent lower than the same period in 2008.

The NAR also reported that the national median price for an existing home on the market was $175,200 - a 12.4 percent drop from one year ago.

Meanwhile, new figures on new home sales from the Commerce Department have raised some hopes in the industry that real estate is seeing a turnaround.

Even though new home sales declined by 0.6 percent in March, the total numbers were higher than analysts had expected, according to CNN Money.

"This is clearly a better-than-expected number," real estate analyst Michael Larson of Weiss Research told the news provider. "Technically, yes, sales declined, but the last three months were revised higher and the raw number came in better than expectations."

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First-time home purchases made up more than half of all transactions during March