First Time Home Buyers
First time home buyers have been watching an ever-shrinking housing supply tick higher for months now. It’s made the most desirable homes turn into multiple offer situations in many markets.
The housing data from January finally showed the market taking a brief pause. The New Home Sales category was hit the hardest with an 11% drop over the month prior and the lowest number of units sold since 1963 when the government began tracking the data.
There were a number of things that triggered the slow down in sales activity and ensuing spike in home supply:
- November’s expiration of the original home buyer tax credit
- Awful weather conditions in nearly every state in January
- Soft employment and consumer confidence figures
All told, this is great news for first time home buyers. If you look at the data from January to October, housing was improving at an alarming rate. With so many buyers acting now to leverage the first time home buyer tax credit, a slight cooling off of the market will likely help negotiations.
It’s reasonable to see some extra perks from builders in the form of free upgrades and/or closing cost concessions. If the $8,000 tax credit, low mortgage rates, and historically low home values weren’t enough, there might be a little extra advantage for people who secure their home before next month’s report is released.
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