First time buyers in the 2009 market

A new report by the Massachusetts Association of Realtors reveals that more than half of the homes sold in the Commonwealth during 2009 were purchased by first-time home-buyers. Some interesting facts from the report: the median age of buyers was 30; of sellers, 44. Half of the sellers were motivated by either a change in family circumstances (marriage, child birth, divorce) or by the need for a bigger house. Only 6% sold because they couldn’t afford the cost of the home.

A couple of observations: Regarding the assertion that only 6% who sold were motivated by the house being unaffordable, that figure is probably true but if the question was “how many find their homes unaffordable but are unable to sell because they owe more on their mortgage than the home is worth?” then the number would be much higher. The same phenomenon also helps explain the large percentage of first time home buyers: most people who already own a home are locked into it because of the lack of equity and so are unable to sell which is a precondition for buying a new residence. Still, it’s a positive sign that new people are entering the home market; it’s better than allowing homes to sit vacant.

The full MAR report is located here.