What Home Buyers Really Want: Ethnic Preferences (Part I)

Among other demographic variables, such as age, income, or stage of life, a buyer’s race or ethnicity can play a significant role in how he/she evaluates the characteristics and features of a prospective home.  A new study recently released by NAHB, What Home Buyers Really Want: Ethnic Preferences, was designed to compare and contrast how housing preferences are affected– or not –by the racial/ethnic background of the home buyer, after controlling for factors such as age and income.  The analysis focused on four racial/ethnic groups of buyers:

  • White (Non-Hispanic),
  • African-American (non-Hispanic),
  • Hispanic, and
  • Asian.

Survey results corroborate well-known demographic differences between these groups:

  • Minority home buyers are younger than White (non-Hispanic) buyers: the median African-American buyer is 39 years old, the median Hispanic buyer is 37, and the median Asian buyer is 36. The median White buyer is 43 years old.
  • Asian home buyers have the highest median household income of all four groups, $72,797, compared with $67,747 for Whites, $50,221 for Hispanics, and $43,774 for African-Americans.  Asians also expect to pay the most for their next home: $283,469, compared with $205,775 among Whites, $181,444 among Hispanics, and $176,397 among African-Americans.

Fig1So what are some of the differences/similarities among these groups in terms of housing preferences?  After controlling for age, income, and household type, survey findings show that Hispanics and African-Americans want more bedrooms.  In fact, 51 percent of Hispanics and 49 percent of African-Americans report wanting to have at least 4 bedrooms in their home, compared to 44 percent among Asians and 36 percent among White buyers.

Fig2A majority of buyers in all four racial/ethnic groups, however, will be satisfied with up to 2½ baths: 73 percent of Asians, 65 percent of both White and Hispanic buyers, and 61 percent of African-Americans.  Similarly, most buyers in all four groups prefer high ceilings (9 feet or more) in the first floor of their home: 75 percent of Asians, 68 percent of African-Americans, 67 percent of Hispanics, and 64 percent of White buyers.

Fig3

Fig4

Placing the washer and dryer in the first floor of the home is a good bet, as buyers of all backgrounds strongly prefer this location for the laundry equipment: 76 percent of Whites, 51 percent of African-Americans, 50 percent of Hispanics, and 46 percent of Asians.  The basement and garage are the second and third choice for about 20 percent of both Hispanics and Asians, significantly more than the share of White buyers who want to do laundry in either of these locations.

Fig5The 2-car garage is the most popular parking facility across all groups, preferred by more than 50 percent of White, African-American, and Asian buyers as well as 47 percent of Hispanic buyers.  A garage for 3 cars or more has far fewer fans, especially among minorities.

Fig6This blog post is the first in a series that will release findings from What Home Buyers Really Want: Ethnic Preferences, covering topics such as the specific home and community features most wanted by buyers of different racial/ethnic backgrounds.



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15 replies

  1. These concepts have little to do with race. It is mostly about family size, stage of life, and economic ability. Why do we insist on inserting race and ethnic background into the equation. You would find many of the same breakout statistics if you controlled for family size, stage of life and economic ability instead of race; e.g. a three member Hispanic household does not want more bedrooms than a five member Caucasian household. This is profiling and misuse of statistics at its worst. If a Realtor were to use these statistics in selecting houses or neighborhoods to show a Hispanic family they would rightly be accused of racial discrimination and steering. Finally any builder that got caught building to specifically Caucasian preferences would, with full justification, be nailed to the wall.

    • One of the main reasons NAHB undertook a separate study on racial and ethnic preferences in 2014 was to study whether racial and ethnic differences that appeared in the original 2013 study could be explained by factors such as family status, age, or economic ability. Sometimes they could; sometimes they couldn’t.

      Before starting to write What Home Buyers Really Want: Ethnic Preferences, NAHB economists performed a statistical analysis of every question in the consumer preference survey on which it’s based. In addition to the four racial/ethnic categories, the analysis statistically controlled for
      • Household type (married couple with children, married couple without children, single parent household, one-person household, or other.
      • Age,
      • Income, and
      • Geography (the nine Census divisions)

      In the study’s detailed tables, rows are shaded whenever preferences for a particular minority group differ after statistically for the above factors. Most of the chapters avoid formal statistical details, but virtually every chapter mentions that the differences discussed are differences that persist after controlling for income, age, etc.

      Technically, the statistical test was an ordered probit, multinomial logit, or linear regression model, depending on the form of the particular survey question. A minority group was reported as different from non-Hispanic white home buyers, only if the coefficient on the indicator variable for that group was statistically significant at the .01 level in the model controlling for all the factors noted above.

      The statistical techniques are explained in more detail in Chapter 14 of What Home Buyers Really Want: Ethnic Preferences. In addition, the 950 pages of statistical output used to establish whether racial/ethnic differences persist in the data after controlling for other factors is available on request from NAHB’s Economics and Housing Policy Group.

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