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First Time Buyers: 32 Percent of Residential Buyers in September

Based on information from the REALTORS® Confidence Index survey, approximately 32 percent of responding REALTORS® reported making a sale to first-time homebuyers in September (31 percent in August). Normally first-time buyers are in the neighborhood of 40 percent of total residential sales, according to NAR’s Profile of Home Buyers and Seller. The proportion of first-time homebuyers hit a peak of approximately 50 percent in 2009. Most first-time buyers obtain a mortgage: About 11.4 percent of REALTORS® who conducted a first-time home buyer sale reported a cash sale (compared to 8.7 percent in August).

The decrease in first-time buyers from the typical 40 percent share in part reflects the difficulty of securing mortgage financing, delays with distressed sales, and purchases of lower priced properties by investors. REALTORS® have noted that that investors offering all-cash sales to sellers have crowded out first-time buyers in some cases, particularly in the case of distressed properties. Unsuccessful first-time buyers typically continue their property search, sometimes making a number of bids before securing a property.