Low home prices and excess supply helped drive a rise in first-time U.S. home buyers and reduce excess inventory, according to a study released Saturday by The National Association of Realtors.
According to the survey, which was released at the 2008 Realtors Conference & Expo, the number of first-time buyers rose to 41 percent from 39 percent of all transactions in 2007.
"First-time buyers are much more flexible in entering the market because they aren't concerned about selling an existing home," National Association of Realtors Chief Economist Lawrence Yun said in a statement.
Yun attributed the increase to low home prices, "plentiful" supply and affordable interest rates. Looking ahead, Yun expects further increases in first-time home buyers because of a temporary first-time buyer tax credit and improvements to the FHA loan program.
"It's been an optimal time for entry-level buyers with a long-term view," Yun said.
According to the study, the median age of first-time buyers was 30, down from 31 in 2007.
The median income for a first-time buyer was $60,600 and typical first-time buyers bought homes costing $165,000.
Of first-time buyers who made a down payment, 69 percent used savings and 26 percent used money from a friend or relative. Another 7 percent received a loan from a relative or friend, while 16 percent used funds from their investments. A fixed-rate mortgage was chosen by 92 percent of those surveyed.
Looking at home sellers, the median age was 47 with income of $91,000. Three-quarters of respondents were married, lived in their home for six years and had their home on the market for eight weeks.
Results from the survey come from a questionnaire that NAR mailed to 133,000 home buyers and sellers nationwide who bought their homes between July 2007 and June.