October 27, 2010

First-Time Homebuyers Buying Smaller Homes

A new report from the National Association of Home Builders has found that first-time homebuyers are choosing to buy smaller and less expensive properties than existing buyers.

The study by the NAHB found that first-time buyers purchased homes costing an average of $184,000 with approximately 1,874 square feet of space. By comparison, the homes purchased by veterans of the real estate market averaged $297,000 and more than 2,500 square feet.

Bob Jones, chairman of the NAHB, says "Builders are increasingly gearing their homes to the needs of first-time buyers, and we expect the trend to continue in the period ahead as the economy begins generating more jobs and more people in their 20s form households."

First-time buyers, which accounted for 41 percent of home purchases from 2007 to 2009, had an average age of 34 years of age, while those trading up had an average age of 46.

However, the overall sales of new homes have continued to struggle in recent months. Statistics from the Commerce Department found there were 288,000 new homes sold in each of the last two months - the second-lowest mark since the government began keeping track.

Tags: first time homebuyers, nahb, new homes, real estate market

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