With the proposed extension and modification of the tax credit for homebuyers pending before Congress, results of a real estate market conditions survey completed by Campbell/Inside Mortgage Finance Monthly show that first time homebuyers will benefit more than current homeowner.
If passed, the $8,000 tax credit for first time home buyers will be extended, and current homeowners would receive a $6,500 tax credit for moving to a new principle residence.
According to the survey, first-time home buyers spent an average of $186,000 on the purchase of their home during the third quarter of 2009, compared with the average price of $309,000 for current homeowners buying a new principle residence during the same period. This tax credit would average 4 percent of the home purchase for first-time home buyers but only 2 percent for current homeowners.
“On a percentage basis, the effect of the tax credit would be much smaller for current homeowners,” Thomas Popik, research director for Campbell Surveys, said. “We estimate that the first-time homebuyer tax credit will result in a 10 percent increase in home sales from March through November of 2009.”

Popik expects the effect of the proposed tax credit for current homeowners to be about half as large from December until the tax credit expiration in the spring of next year.

“It might be 5 percent of 3 million transactions, or about 150,000 incremental home sales. Incremental sales to first-time homebuyers could be an additional 300,000, for a total of 450,000 incremental sales due to the tax credit extension,” Popik said.

The proposed homebuyer tax credit would apply to all income-qualified homebuyers, including those who would have bought without the tax credit incentives. While current homeowners made up 38 percent of the home purchase market during the third quarter of 2009, first time home buyers accounted for an additional 42 percent.
These statistics were used by Campbell Surveys in creating an estimate for the total cost of the homebuyer tax credit. According to the survey, the total could be as large as $17 billion, with $7 billion for current homeowners and $10 billion for first-time homebuyers. Involving more than 1,500 real estate agents nationwide, the Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions provides up-to-date intelligence on home sales and mortgage usage patterns
http://campbellsurveys.com/housingreport/housing1.htm