A profile of American homebuyers
By Judi Marcelonis -- Industrial Distribution, 10/1/1998
Low interest rates and strong job growth helped to make housing more attainable for many consumers last year. And the larger number of buyers economically capable of making purchases boosted house sales to record levels in 1997.In Chicago Title & Trust Co.'s survey of 20 major metropolitan markets, total home sales topped out at 1,845,000 last year, reflecting a 4.1% increase over 1996 levels. The survey identifies the characteristics and the demographic make-up of the American purchasers of these homes. An overview of some of the survey results is presented below.
Consumers that occupied opposite ends of the income scale powered home sales in 1997. The percentage of surveyed homebuyers earning a combined family income of $60,000 or more grew over the year, accounting for nearly 46% of all sales in 1997. This increase was due primarily to the rise in homebuyers earning $100,000 or more.
Buyers with a combined family income of less than $60,000 in 1997 experienced a decline from 1996's figures, comprising about 54% of all home consumers. Among these buyers, those in the under $40,000 income bracket increased their market share while the percentage of purchasers earning between $40,000 and $59,999 contracted.
Gains in the distribution of household income of buyers in the lower income brackets is consistent with the higher number of first-timers and minorities that entered the housing market last year. The survey revealed that the percentage of minority buyers skyrocketed 27.7% in 1997 while Caucasian purchasers fell off their previous buying pace by 1.3%. A larger percentage of African American, Asian and Hispanic consumers made a first-time purchase while more Caucasian, Native American and other purchasers were repeat buyers. The market share of all first-time buyers edged higher in 1997 to 46.8%, while that of repeat buyers dipped slightly to constitute 53.2% of the market.
The marital status of homebuyers showed a surprising change in 1997 as the percentage of unmarried buyers, including those single, divorced and widowed, grew sharply, climbing 28.9% to capture 35.3% of the market. Males comprised 19.1% of these unmarried home buyers, while females consisted of 16.2%. In contrast, home sales to married consumers declined in 1997, resulting in a market share of 64.7%. Of these married buyers, 57.3% were purchasing a home for the first time, compared to 42.7% of all non-married consumers.
The median home price for all surveyed markets increased 4.2% to $159,700. The median price of homes purchased for both repeat and first-time buyers rose over the year, with the median price for repeat buyers at a higher $178,700 compared to the first-time consumers' median price of $135,400.
With the high percentage of single buyers in the market in 1997, the average price of purchased homes was unable to keep the pace with the median price. Average home prices inched up 2.4% to $192,300. Again, the average price for first-timers, $157,800, fell well below that of repeat buyers, $222,700. I
Talkback
Related Content
Related Content
Sponsored Links
View All Blogs
