Buyers motivated by affordability, interest rates
Price declines and low interest rates are motivating millions of home buyers to shop for bargains in the most affordable housing market in 28 years, yet at the same time only one-in-ten of today’s home owners say they have delayed selling their home due to those same market conditions, according to the new national Realtor.com® Homeownership Survey. Based on the Realtor.com survey, affordability is clearly driving more than two-thirds (65.2%) of potential buyers back into today’s housing market. Nearly one of five prospective buyers (19.6%) say foreclosure bargains in their communities would motivate them to purchase a home, the most important reason they’re interested in buying in the near future. An additional 15.5 percent said they’re motivated to buy soon because they think prices are as low as they will go, and another 15.5 percent said they’re motivated to buy before interest rates rise. For 14.6 percent of first time homebuyers, the Federal $8,000 tax credit is the impetus to purchase a new home in the future.
Distressed sales of foreclosures and short sales, which constitute nearly half of all existing home sales today, are not universally popular with buyers. Two-thirds of those surveyed (66.3%) said they are not likely to consider buying a foreclosure in the future. However, if sellers were willing to pay closing costs, 23.9 percent would be motivated to purchase foreclosures, and 19.5 percent said they would buy a foreclosure if there was a higher level of certainty related to home repairs required to make the home “move-in” ready.
Current fear of foreclosure has lessened since the last Realtor.com Homeownership Survey in March 2009, when 52.5 percent of respondents expressed concern that they or someone they know may face foreclosure in the next 6-12 months. In this latest survey, the number of home owners concerned about foreclosure dropped 8.7 percent compared to March 2009, and the number of owners feeling “not very concerned” or “not concerned at all” increased by 8.4 percent combined in the past three months.
Source: Real Trends