Buyers Rush to Meet Tax-Credit Deadline

Daily Real Estate News

Nearly half the homes sold in March – 48.2 percent – were purchased by first-time buyers, according to a survey of more than 1,500 real estate practitioners by Campbell/Inside Mortgage Finance.

“Many observers had felt that the pool of first time home buyers had been depleted last fall,” Thomas Popik, research director for Campbell Surveys, said in a statement. “Instead, the normal spring-summer buying season is combining with the tax credit to produce blow-out results for first-time home buyers.”

First-time buyers must have a signed contract on or before April 30, 2010, to qualify for the $8,000 federal tax credit. Qualifying escrows must close on or before June 30, 2010.

Mortgage applications to buy homes increased 10.1 percent last week on a seasonally adjusted basis compared with the previous week, according to the Mortgage Bankers Association weekly survey.

On an unadjusted basis, the purchase index increased 11 percent compared with the previous week, but was down 5.2 percent from the same week a year ago.

“Purchase applications continued to increase coming out of the Easter holiday, as we approach the end of the home buyer tax credit, and are up modestly over last month.” said Michael Fratantoni, MBA’s vice president of research and economics.

Declining Treasury rates pushed loan rates down from the previous week:
30-year fixed-rate mortgages decreased to 5.04 percent from 5.17 percent. 15-year fixed-rate mortgages decreased to 4.34 percent from 4.45 percent. 1-year ARMs decreased to 6.95 percent from 7.02 percent.

Source: Reuters News Service and Mortgage Bankers Association (04/21/2010)

Scott Chappell and Brian Bean
Real Estate Brokers

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