First-time homebuyers show renewed interest in housing market

More first-time homebuyers are entering the housing market in early 2013, according to the latest Campbell/Inside Mortgage Finance Housing Pulse Tracking Survey.

First-time homebuyers accounted for 34.5 percent of all home purchases in February, up from 32.9 percent in December 2012. Traffic from first-time buyers also rose to a survey high of 66.4 in February.

“First-time homebuyers are the wildcard in the upcoming spring-summer homebuying season,” said Thomas Popik, research director for Campbell Surveys, in a statement. “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-down payment financing, such as FHA mortgages, and announced FHA program changes will take effect this spring.”

In the next few months, FHA will be increasing its Monthly Insurance Premium (MIP) and require payment of the MIP for the full term of the loan.

While first-time homebuyers represented the fastest growing category of home purchasers between January and February, current homeowners saw the biggest drop in market share during the one-month period – falling from 44.3 percent to 42.5 percent. That was the lowest market share for current homeowners recorded by the HousingPulse survey since last June.

Investor interest in the housing market also remains strong, according to the latest HousingPulse results. The investor share of home purchases rose to a four-month high of 34.5 percent in February. And the HousingPulse Homebuyer Traffic Diffusion Index for investors rose from 68.6 percent in January to 70.7 percent in February.

The increase in investor activity has been accompanied by a rise in sales of distressed properties. The HousingPulse Distressed Property Index, which measures the share of home purchases involving foreclosed properties or short sales, reached a four-month high of 36.2 percent in February.

The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey involves approximately 2,000 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.