Taking a Closer Look at Today’s Home Buyers

Tim King, President
North Coast Building Industry Association (NCBIA) www.ncbia.com

As mortgage interest rates slowly tick down, who are today’s home buyers and what motivates them to make a purchase?

Recent National Association of Home Builders (NAHB) analysis of the latest American Housing Survey (AHS) provides insight into recent home buyers and the home buying process. Conducted in odd-numbered years by the U.S. Census Bureau, the 2021 AHS studied 10.2 million households that bought a home in the previous two years. 

Of the 10.2 million households, 40% were buying their first home, while 7% were purchasing a new home. In general, new home buyers are older, make more money, and are purchasing bigger, more expensive homes. On the other hand, first-time home buyers are younger, make less money, and are purchasing smaller, less expensive homes.

Home buyers said the top two reasons for choosing a home were ‘for a better home’ (60%) and ‘a better neighborhood’ (49%). Household formulation was third. More first-time home buyers reported forming a new household as the top reason for moving compared to buyers who purchased new homes seeking a better neighborhood. 

The survey also asked about the size of homes and found that newly built homes tend to be larger. Nearly a quarter (24%) of new homes were between 1,500 to 1,999 sq. ft. and 23% were between 3,000 to 3,999 sq. ft. Compared to newly built homes, homes purchased by first-time buyers tend to be relatively smaller, with 31.6% homes between 1,000 to 1,499 sq. ft. The median size of new homes is 2,334 sq. ft. while the median size of homes bought by first-time buyers is 1,669 sq. ft.

Saving money to purchase a home is an important part of the process. The survey results provided insights on how much money buyers allocated to downpayments. NAHB analysis found that half (50%) of all buyers had a downpayment of 0 to 20%. Only 18% purchased their home without a downpayment. Among all recent home buyers, first-time buyers had relatively smaller down payments. A majority (82%) of first-time home buyers put no more than 20% down. 

As single-family home construction expands this year and interest rates become favorable, many individuals and families may start planning to buy a new home. Contact the NCBIA to learn about new homes available in the area.  

We are your local not-for-profit trade association representing member companies involved in all aspects of home building, remodeling, and other aspects of services available to help you in the future as well as more information on the above topic.   So, you can see it is for your protection that you use a NCBIA member. If you are unsure that your contractor is a member of the NCBIA or you are looking for a list of NCBIA members, you can visit our website at www.ncbia.com or call 440-934-1090.   We also have a job posting board (under the Industry tab).   

Our 24/7 Virtual Parade of Homes!!!  Allows you to look at some of our builders’ new homes and communities on your mobile device or computer at your leisure.  We know time is our greatest asset and via our NCBIA Virtual Parade of Homes, we save you time looking for a new home or a community that fits your lifestyle.

Save the Date – our (free) annual Home and Remodeling Show – February 24th & 25th – Emerald Event Center,  33040 Just Imagine Drive, Avon.  84 Lumber is sponsoring a kid’s corner with building activities for the kids to enjoy.    Come and see how we can make your dream home a reality!  Check out our website for a full list of vendors –  https://www.ncbia.com/consumers/home-remodeling-show

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