August 10th, 2009 9:27 PM by Scott Bray
Low interest rates, combined with falling home prices, are attracting potential homebuyers back into the market, surveys say from the National Association of Realtors (NAR) in 2009.
Nearly 20% of the potential buyers are being motivated by foreclosed property being sold at bargain prices.
68% of consumers said price declines were the motivating factor in their decision to purchase a home, while 39% said record low interest rates helped them move to a better location. There were 23% who said a rate increase pushed them to buy now.
The survey also found that those buying REO had the highest level of difficulty in obtaining financing, 8.9 on a scale from 1-to-10. For traditional sales buyers it was 7.7 and for short sales buyers it was 7.6.
On average, homebuyers spent 8.4 weeks considering buying a home in 2009, compared with 7.2 weeks in 2008. Buyers spent an average of 10.3 weeks searching for a home with their Realtor, compared with 8.7 weeks in 2008.
Loan-to-values were low, as first-time buyers had an average downpayment of 19.7%, while repeat buyers put down an average of 28.3%.
According to the NAR, it found that just fewer than 15% of first-time buyers said the Obama administration tax credit is bringing them into the market.