Housing-market bust is changing buyer behavior

Twenty-seven percent of first-time buyers who purchased a home between July 2009 and June 2010 received a gift from family or friends to help with the down payment, according to the National Association of Realtors’ annual Profile of Home Buyers and Sellers survey, released at NAR’s annual conference here.

That’s up from 22% a year earlier, and is the highest percentage in the more than 20 years the survey has been conducted, said NAR spokesman Walter Molony.

Also, 9% of first-time buyers received a loan from a relative or friend in the most recent data, compared with 6% who said the same in the results released last year, according to NAR. The survey included responses from 8,449 home buyers.

It’s likely many parents were motivated to help their children take advantage of a now-expired home-buyer tax credit of up to $8,000, and other favorable conditions, including lower prices and mortgage rates, researchers said. Tougher lending criteria may have also been a factor playing into the trend, Molony said.

First-time home buyers made up a record 50% of all buyers during the period, up from 47% in last year’s figures, according to the report.

While gifts have helped young buyers make down payments for years, “more people are having to do it because even if their credit is good, they need [more of] a down payment,” said Hope Harvey, a property manager and sales broker with Sugar Ski & Country Club, in Banner Elk, N.C.

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