Affordability Key for Selling to First-Time Home Buyers
Home builders with an eye on the first-time buyer market may not want to design their product too much differently than the homes that are being built for move-up buyers, but they definitely will want to put the accent on affordability, according to an NAHB analysis of characteristics of first-time buyers from the 2005 American Housing Survey from the U.S. Census Bureau.
The median price of the homes purchased by first-timers was $150,000 in 2005, compared to $230,000 for the trade-up market, according to NAHB economist Elliot Eisenberg, whose analysis of the survey data is published in the current issue of HousingEconomics.com.
And while the 2.4 million homes bought by first-timers in 2005 accounted for an impressive 43% share of the homes sold that year, the large majority of them — 86% — were found in the existing home market. “Given that new homes are usually more expensive than existing homes, these results ate not surprising,” the study says.
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