Campbell/Inside Mortgage Finance’s

May 2010
Housing Trends Update is derived from the

First-Time Homebuyers Started To Exit Housing Market in April
First-time homebuyers started to exit the housing market in April, ahead of expectations, according to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions. The closely-watched survey found that 43.4% of April’s home purchase transactions were attributable to first-time homebuyers, a significant drop from March’s figure of a huge 48.2%. For the winter months of January to March, first-time homebuyer participation had been growing at a rapid clip; this month’s data represents a clear reversal in the trend. First-time homebuyers have until June 30 to close transactions and qualify for a tax credit of up to $8,000. Previously, the first-time homebuyer tax credit was due to expire on November 30, 2009, but Congress extended the deadline and expanded eligibility to current homeowners. Current homeowners made up the slack from first-time homebuyers, expanding their participation from 33.5% in March to 38.7% in April. The tax credit for current homeowners is up to $6,500. “We were surprised to see the early decline in first-time homebuyer participation,” commented Thomas Popik, research director for Campbell Surveys. “When tax credit was expected to expire last November, we saw a peak of first-time homebuyers in October. Now the first-time homebuyer peak appears to have occurred not one month, but two months early.”

Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions
It is based on a national survey of more than 1,500 real estate agents each month and provides up-to-date intelligence on home sales and mortgage usage patterns throughout the United States


Housing Trends Update
Housing Trends Update is published monthly and is available only to real estate agents who are part of the Campbell/Inside Mortgage Finance monthly survey panel. For information on joining the panel contact John Campbell at Campbell Surveys. 202-363-2069 john@campbellsurveys,com Copyright © 2010 by Campbell Surveys

Homebuyer Participation by Type
First-time homebuyers saw their share of the home purchase market tumble by a surprisingly large 5% between March and April.
Source: Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions

50% 42.4% 40% 36.5% 42.5% 36.7% 42.0% 39.3%

46.9% 44.9% 41.4% 37.7% 42.5% 42.9% 41.2% 37.5% 39.8%

48.2% 43.4% 38.7% 33.5%
First-Time Homebuyer

s n o i t c a s n a r T e d i S y u B f o t n e c r e P



Current Homeowner

21.1% 20%

20.8% 18.7% 15.4% 13.7% 16.9% 19.0%






Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10

Housing Trends Update May 2010
Separately, the proportion of damaged REO sold during April plunged. Damaged REO accounted for 15.4% of transactions in March, but only 12.8% in May. One reason for the drop in damaged REO may be increasing numbers of short sales.

Short sales—where the home is sold for less than the mortgage amount outstanding and with lender approval—represent a way to resolve homeowners in default without going through the foreclosure process. Homes often become damaged during foreclosure due to neglect, vandalism, or theft of appliances and other fixtures. “The new Home Affordable Foreclosures Alternative (HAFA) program for short sales provides additional incentives for underwater homeowners and lenders,” commented Popik. “This government program only took effect in early April, so we expect short sales to accelerate in coming months.” Notably, the average time on market for short sales declined from 17.8 weeks in May to 16.5 weeks in April, according to the monthly Campbell/Inside Mortgage Finance survey of Real Estate Market Conditions. For December and January, short sales had averaged approximately 5 months on market. Notably, average time on market for damaged REO, move-in ready REO, and non-distressed properties was nearly level or rising during the February to March timeframe. For the first time, the survey received some positive comments from real estate agents on short sale process reengineering at major mortgage servicers. “Sales are still slow, especially the short sales—I have seen a great improvement with Bank of America and the Equator system, but other banks are still a challenge,” commented an agent in California. An agent in New Hampshire was less sanguine, commenting, “The short sales are becoming more prevalent as the lenders are more likely to work with distressed homeowners who don't qualify for the HAMP program & opt for the HAFA as an alternative to foreclosure. The Equator system for short sales still has a lot of glitches in the system that need to be worked out.” Despite operational difficulties in processing short sales, these distressed property transactions are important to many agents. Over the past 5 months, short sales have grown from 12.4% of the market in November to 17.9% in April, despite a slight downtick in short sales for the most recent month.

Average Listing Side Commission
Listing side commissions on short sales are the most attractive of any property type, according to the April survey results. Short sale commissions average 2.78%, substantially above the average commissions of 2.68% and 2.67% for damaged REO and move-in REO, respectively. Source: Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions

Property Type
Damaged REO Move-In Ready REO Non-Distressed Short Sale

April 2010
2.68% 2.67% 2.74% 2.78%

All Properties


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