Rising rates on mortgages rising prompted more first-time home buyers to acquire homes recently.
That was one of many conclusions of the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
While mortgage rates began increasing from record lows at the begining of November the first-time home buyer share of home purchases surged from 34.4 percent in October to 37.2 percent last month.
-The recent surge in interest rates has created potential home first-time house buyers, increasing, first-time home purchase, mortgage interest ratesbuyers nervous,- said Thomas Popik, director of the HousingPulse survey. -If rates go up considerably more, then a good number of them will not qualify for the properties they need. Because of this, they're making bids on homes and quickly closing before their rate locks expire.-
-First-time buyers have returned investigating homes,- said a realtor in Oregon who commented within the survey. Mortgage Loans.
-Interest rates have helped spur recent activity,- said an agent in Colorado.
Although mortgage rates have increased their record lows this summer, they're still at historically lower levels. Mortgage Loans.
The survey also found that the proportion of current homeowners purchasing homes fell in November, from 44.2 percent in October to 42.9 percent recently. Current homeowners usually have a harder time closing with a home purchase rapidly because they often have to market their current residence to purchase a fresh home, Popik said.
Not all kinds of home sales increased. House buyers avoided short sales, which need several months to obtain approval from your current homeowner's mortgage servicer. Homeowners were unwilling to have to wait 5 to 6 months for the response from your mortgage servicer and risk seeing home loan rates increase.
Investor Desire for Distressed Properties Falls
The analysis also found that investors became less considering distressed properties recently.
Investor activity fell from 21.4 % for home purchases in October to 19.9 percent in November. The investor share of home purchases peaked at 22.3 % in September, a 15-month high.
Investors have concerns that home prices will fall further next year due to the large inventory of distressed properties, Popik said. The quicker flipping strategy of renovating a property and selling it immediately is becoming increasingly difficult. Instead, more investors must rent their properties along with the buy and hold strategy is progressively more common.
The survey that could reach over 3,000 real estate agents was jointly created by Campbell Communications, a communications firm in Washington, DC, and Inside Mortgage Finance, a newsletter focusing on the housing finance industry.
