In a new study, NAHB uses the 2021 American Housing Survey (AHS) to investigate the characteristics of recent home buyers, defined as households who purchased homes in the two years preceding the date the 2021 AHS was conducted. According to this criterion, roughly 10.2 million households recently bought and moved to a new home. The study focuses on two important groups of home buyers: those who bought a brand-new home (new home buyers), and those who purchased a home for the first time (first-time home buyers).
One important characteristic of home buyers is their income. In the 2021 AHS, the median household income for all recent home buyers was $97,700. Median household income among all home buyers grew 13% from $60,000 in 2001 to $68,000 in 2007 and then fell 4% to $64,998 in 2011. After the Great Recession, household income accelerated, jumping by around 50% from $64,998 in 2011 to $97,700 in 2021, as shown in Chart 1. Not surprisingly, new home buyers consistently show higher median income than first-time home buyers ($112,100 vs $90,000 in 2021).
In addition to characteristics of buyers, the AHS so provides information about the homes they purchased. For example, the median value of the homes purchased was $318,185 overall in the 2021 AHS. The median value of new homes was $429,205, and the median value of homes purchased by a first-time buyer was $271,445.
The 2021 AHS also shows how the homes were purchased. More than half of recent buyers put no more than a 20% down payment on the homes they purchased, as shown in Chart 2. Around 18% of all buyers purchased a home without a down payment in 2021, 50% had a down payment of 0 to 20%, and only 16% put more than 20% down. Among all recent home buyers, first-time buyers had relatively smaller down payments. Approximately 82% of first-time home buyers put no more than 20% down, including 18% with zero down payment. In comparison, only 63% of buyers purchased new homes with no more than 20% down.
Considerably more detail is available in the complete study. Please visit the special study page to view the full report.
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Understanding the preferences and demographics of home buyers is crucial for developers and lenders. This data can help lenders tailor construction loan products to meet the specific needs of potential home buyers, ensuring that financing options align with the preferences of the market. Builders armed with this information can make informed decisions, enhancing the appeal of their projects to potential buyers and increasing the likelihood of securing construction loans.