New research from NAHB finds a growing disparity between the median income of all home buyers and the median income of new home buyers.
According to the 2011 American Housing Survey (AHS), home buyers overall had a median income of $64,998. The subset of home buyers that bought new homes had a median income of $81,715, about 26 percent more than the median income of all home buyers. This spread is the largest it has been since before the 2001 AHS.
Graph 1. Percent Above or Below the Income of All Buyers
The subset of home buyers that bought a home for the first time had a median income of $59,946, about 8 percent less than the median income of all home buyers. The disparity between the income of all home buyers and first-time home buyers is shrinking—this spread is the smallest we have seen since before the 2001 AHS.
New home buyers are purchasing more expensive and larger homes when compared to all home buyers. The median market value of a new home purchased is $230,000 and the median size is 2,100 square feet. According to NAHB’s recent report “What Home Buyers Really Want” , buyers expect to pay a median of $203,900, and would like a median of 2,226 square feet.
The median value of all homes purchased dropped $35,000 between 2007 and 2009, but only $10,000 between 2009 and 2011. The median value of new homes purchased was stable at $230,000 in both 2009 and 2011.
Graph 2. Median Market Value of Homes Purchased
Between 2009 and 2011, 1.6 million fewer households bought a home than between 2007 and 2009—8.4 million households bought a home in the 2009 study, compared to 6.4 million in the 2011 study. Of those that bought a home, only 8 percent bought a new home. This is down from 17 percent of households who bought a new home in the 2009 study. According to “What Home Buyers Really Want”, 55 percent of home buyers (prospective and recent) would prefer to purchase a new home.