Purchases By Owner-Occupants Drive Housing Market in June

By Chris B Johnson Realtor®  What is Selling In Your Neighborhood?     Time To Buy #ChrisBJohnsonRealtor

Current homeowners and first-time homebuyers increased their share of home purchase activity as the summer started, according to results from the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

The demand from owner-occupants helped improve various metrics for non-distressed properties. Current homeowners accounted for 47.6% of purchases in June, based on a threemonth moving average, up from a 45.6% share in June 2014.

First-time homebuyers accounted for 38.3% of home purchases in June, a level last seen in 2010 when firsttime homebuyer activity was boosted by a federal tax credit. The investor share of home purchases has declined significantly, hitting just 14.1% in June.

As recently as March, investors accounted for 18.7% of purchases and they had a 17.2% share in June 2014. Trends in home prices and an expected increase in interest rates have helped spur home purchases by owner-occupants, according to industry participants. “The firsttime homebuyer has entered the market in a good way,” said an agent in Arizona. “They are concerned with the possibility of being priced out of the market again with home prices rising and the possibility of interest rates going up.” Demand from owner-occupants along with limited inventory have prompted a significant increase in sales-to-list price ratios for non-distressed properties.

The sales-to-list price ratio for non-distressed properties was 98.5% in June, the highest reading for the metric in more than five years. In the previous two years, sales-to-list price ratios for non-distressed properties topped out at 97.8%. California continues to lead the country in terms of sales-to-list price ratios, hitting 102.0% in June. “Homes are being priced under market value to create a multiple offer scenario, thus driving the prices over market value,” according to one agent in the state.