Are first-time homebuyers really becoming more rare?

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A flurry of recent press articles — in the Wall Street Journal, Bloomberg Businessweek and USA Today — all referencing data from the National Association of Realtors (NAR), that stated the percentage of first-time homebuyers purchasing homes has been dropping prompted two Federal Reserve Bank of Atlanta economists to do their own analysis.

They found, using Census Bureau Microdata (October 1983 – September 2011), Campbell/Inside Mortgage Finance data (July 2009 – July 2013) and data from NAR’s Realtors Confidence Index (October 2008 – July 2013) and Profile of Homebuyers and Sellers (2001 – 2012), that the percentage of first-time homebuyers has not dipped appreciably in the years covered by the data.

The economists came to their conclusion after accounting for the spike in first-time homebuyers that occurred between July 2008 and September 2010 with the U.S. government’s first-time homebuyer tax credit that gave qualifying first-time buyers up to an $8,000 tax credit on a home purchase.

Source: Federal Reserve Bank of Atlanta

 

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