iEmergent Releases First-Time Home Buyer Market Forecast

Posted by Orb Staff on July 07, 2009 No Comments
Categories : Residential Mortgage

ent, a Des Moines, Iowa-based market research, forecasting and advisory services firm, has released its updated 2009 First Time Home Buyer (FTHB) loan volume forecasts to provide lenders with current information about the size, scope and profiles of FTHB lending opportunities in individual markets nationwide. Using iEmergent's FTHB purchase forecasts and simple analytical tools, lenders can better quantify the FTHB lending opportunities in markets nationwide and identify where those opportunities best match their market presence, resources and capabilities, as well as indicate where their oversight needs to be more diligent, iEmergent says. Currently, iEmergent projects that 2009 FTHB lending will reach 955,000 loans and generate $133 billion in dollar volume nationwide, representing approximately 22.3% of all purchase units and 19% of all purchase dollars. The firm anticipates a higher projection for FTHB transactions if the tax credit for first time buyers is expanded to $15,000, as has been advocated by several trade groups and politicians. If the tax credit is expanded and the deadline for using this credit is not extended beyond the end of this year, lenders should be prepared for a sizeable spike in volume prior to year-end, according to iEmergent. iEmergent synthesizes a wide range of historical market, demographic and housing metrics to determine the number of potential FTHB households within local communities. Each market's long-term mortgage generation calculator – the Purchase Mortgage Conversion Rate – is applied to produce an initial estimate of potential FTHB volume, which is then adjusted for other factors, such as unemployment, foreclosure rates, home affordability and available inventory trends. "Since the total purchase volume outlook for 2009-2010 remains relatively weak, FTHB lending overall will represent a greater portion of total purchase lending than in the past," says Dennis Hedlund, founder and president of iEmergent. "However, as local markets seek a new balance point in housing and home finance, the percent of total purchase volume represented by the FTHB segment will retreat from recent short-term bursts." SOURCE: iE

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