Study Estimates Tax Credit Added 357,000 First-Time Buyers

By AUSTIN KILGORE
September 22, 2009 10:16 AM CST

[Update 1: Clarifies location of Campbell Communications]

A new study estimates the $8,000 first-time homebuyer federal tax credit resulted in 357,000 additional home sales so far in 2009.

The study, released by Campbell Surveys, a division of Washington, DC-based marketing and public relations firm Campbell Communications, conducted surveys of real estate agents and calculated the figure by comparing the rate of first-time buyers during the first two months of the year both before and after the tax credit was instituted.

The monthly rate of first-time buyers increased from 32% in January and February to 43% every other month of the year except July, when it was 42%.

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First time home buyers really have it make this year, especially in Austin.  Historically, the current “even market” is the closest we’ve had to a buyer’s market in Austin.  Pair great deals (not half-price deals like Las Vegas & Pheonix, but great deals for Austin real estate) with $8,000 free from Uncle Sam then add amazingly low interest rates beginning in the 4%-5% range… if there is anyone out there who has been considering buying their first home in Austin, now is definitely the time to buy.

I’m happy to go over the numbers with anyone to see how much money you are really saving.  Here’s a rough idea:

• 5-10% off the price of the home of what we would have seen if homes had continued to appreciate at their pre-2008 rate coupled with the motivations of frustrated sellers
• $8000 from Uncle Sam that can be used toward your downpayment in most cases (you no longer need to save as much)
• Interest rates in the 4%+ range instead of the early 2000′s or predicted 2010 6%+ range means lower monthly mortgage payments which can be $200 or more each month, or $2400 for each year you spend in the home

What you need:

• A decent credit score (sub-prime/high-risk mortgages are a thing of the past)
  
• Some cash for inspections & earnest money
• An income that can support mortgage payments – lenders prefer that your mortgage be less than 28% of your monthly income and total payments (mortgage + car, etc) to be leww than 35% of your monthly income