The Official Online Newspaper of NAHB
A growing segment of the housing market, first-time home buyers are contributing to an increase in demand for smaller and less expensive new homes, according to research from economists at NAHB.
Delving into data from the most recent biennial American Housing Survey, which was conducted by HUD and the Census Bureau in 2009, the study, “Characteristics of New and First-Time Home Buyers,” finds that 41% of the 8.4 million households who bought a home between 2007 and 2009 were first-time buyers.
The market share of first-timers was up from 35% in both 2005 and 2007. Although some of the demand was fueled by the initial version of the home buyer tax credit in mid-2008, which was specifically targeted to those buying a home for the first time, the upward trend is expected to continue as children of baby boomers — members of a generation that is larger than their parents’ — move into their household formation years in the period ahead.
Although new housing is significantly more expensive than the existing housing stock, 13% of first-time buyers between 2007 and 2009 purchased new homes. By comparison, 17% of all the homes sold during that period were new.
Competing with foreclosures and large house price declines in the existing home market, new homes lost ground disproportionately during the housing downturn, falling from a 21% share of the homes sold in both 2005 and 2007. ... Read More
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No one at the Remodeling Show in Baltimore on Sept. 14-17 seemed to be sure of when the market will fully recover from its current downturn, but those whose businesses are performing the best aren’t waiting to see a substantial improvement. Instead, they have been changing who they are and how they operate, recognizing that their prospective customers have changed drastically as a result of the economic recession.
“We’ve all been burned a little bit and we want to put our poker chips on things that have given us a return,” said Bruce Case, president of Case Design/Remodeling, Inc. in Bethesda, Md.
After seeing its average job size tumble last year to half of what it was in 2008, his company has restructured to bring in more medium-sized jobs, and it is finding demand solidifying for kitchen and bath improvements. But Case does not foresee an end to the downturn for another two to five years, and is projecting modest annual gains in the 5% to 8% range in the meantime. ...... Read More
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