The impact of mid-2022’s more-generous First Look policies is helping to reshape the housing market. Data from Auction.com demonstrate that these policies have improved the likelihood of owner-occupants purchasing distressed homes at a lower cost, according to the recent Urban Institute article, “New First-Look Policies Have Helped Owner-Occupants Purchase Lower-Cost Homes,” by Laurie Goodman and Jung Hyun Choi.
Pivotal policy alterations implemented as part of the Biden administration’s Housing Supply Action Plan represent a commitment to affordable homeownership. Initially introduced in 2009, First Look policies have now evolved into a more-potent force helping to stabilize neighborhoods.
The article says that between August 1, 2022, and August 11, 2023, 13,226 real estate-owned properties were auctioned on the Auction.com platform, and 56 percent went through First Look. Nearly 10 percent of these properties went to owner-occupants, a sharp contrast when compared to the 5.9 percent for non-First Look-eligible properties.
“The data also show that a higher share of non–First Look properties sold than First Look properties,” said the study authors. “This difference in part can be attributed to a substantially higher share of occupied properties in the First Look program, which poses a barrier for purchasers, both owner-occupants and investors. But even with a lower overall sales rate, owner-occupants make up a higher share of purchases for properties sold through First Look. As a share of total sales, owner-occupants comprised 31.1 percent of First Look–eligible sales compared with 14.3 percent for non–First Look properties.”
The Auction.com data not only reveals the positive influence of the 2022 expanded First Look policies, but it also underscores the potential for further expansion of this program to empower owner-occupants and usher in a new era of accessible and equitable homeownership.