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Updated Study Details Characteristics of New-Home Buyers

Updated Study Details Characteristics of New-Home Buyers

Today's photos are those of Archival Designs' Award Winning Luxury House Plan, Dalmany:  2275 sf

Using newly published government data, NAHB's economists have updated an earlier study on home buyer characteristics to show how different buyer subsets have evolved in recent years. Among other findings, the study notes that 8% of the 6.8 million households who purchased a home between 2009 and 2011 bought new construction. 

This is down from the 17% of those who chose to purchase a new home in the 2009 study, despite the fact that a recent NAHB consumer survey showed that  55% of home buyers would actually prefer to purchase a new home. The latest 2011 data also reveal that 46% of purchasers over the previous two years were first-time home buyers.

This compares to 35% of home buyers who were first-timers in 2007, and 41% who were first-timers in 2009. Meanwhile, new-home buyers in the latest study had a median income of $81,715, compared to a median of just under $60,000 for first-timers and approximately $65,000 for all buyers. See below for additional highlights:

  • The median age of new-home buyers is 38 years, while the median age of first-time buyers is 31 years and the median age of trade-up buyers is 47 years.
  • New-home buyers look at a median of 6 new homes before making a purchase, versus buyers of existing homes who look at a median of 10 homes.
  • In 2011, the median income of new-home buyers was 26% higher than that of all home buyers. This spread has been increasing since 2005, and is currently the largest seen in more than 10 years.
  • While the average household size for all home buyers has been declining in recent years, it increased marginally (to 2.79 persons) for new-home buyers in 2011.
  • The median market value of a new home purchased between 2009 and 2011 was $230,000, versus $162,000 for an existing home. There was a 35% difference between the market value of a new home and that of all homes purchased, which is the largest the spread has been since 2001.
  • The median size of new homes purchased from 2009-2011 was 2,100 square feet. This compares to the median size of existing homes purchased during that time, which was 1,750 square feet.

Court Settlements Provide Millions for Remediation of Chinese Drywall  

Five class-action settlements approved by a federal court on Feb. 7 will make available millions of dollars to remediate homes built with Chinese drywall. The settlements, which are expected to benefit more than 10,000 property owners, effectively end the Chinese Drywall Multidistrict Litigation, resolving all claims, counterclaims, and third-party claims among the settling parties. Companies for which the settlements were certified include: Interior/Exterior Building Supply, LP; Banner; L&W Supply Corp.; Knauf; and global participating builders, suppliers, and installers. Note that this does not include Taishan entities, which are not settling and continue to argue that the court has no personal jurisdiction over them. That issue is currently the subject of a case before the Fifth Circuit Court of Appeals. Below are details applying to only those parties involved in the Feb. 7 settlement agreements:

Interior/Exterior Building Supply, LP (In/Ex) Settlements

This agreement provides for the tendering of all of InEx’s primary insurance proceeds, in the amount of $8 million, for the benefit of a national class with claims against InEx involving Chinese drywall.

Banner Settlements

This agreement provides that Banner and its insurers will provide $54.475 million for the benefit of a nationwide class consisting of all persons or entities with claims against Banner arising from or otherwise related to Chinese drywall.

L&W Settlement

The L&W Settlement is a component of the plan for global resolution of the Knauf/KPT supply chain. Financial details on this were not revealed in the court order.

Knauf Settlement

The agreement creates two funds from which plaintiffs may recover: the Remediation Fund and the Other Loss Fund.  The Remediation Fund is uncapped and will pay to repair roughly 5,200 properties, mostly in Florida, Louisiana, Mississippi and Alabama.  The Other Loss Fund, reported to be capped at $30 million, will reimburse for certain provable economic losses and provide a review process for individuals who believe they have bodily injury claims. In addition, attorneys' fees and costs will be paid.  This settlement is intended to resolve claims made in filed actions which arose out of KPT Chinese drywall installed in properties in the United States. Importantly, only those who filed a lawsuit in the litigation as of Dec. 9, 2011 are eligible as class members.

Global Settlement

The Global Settlement involves various builders, suppliers and installers and provides for a total payment of $70.5 million for class members, regardless of the type or brand of Chinese drywall in their properties and regardless of whether they filed their claims in the MDL or another forum. The settlement does not include any properties located in Virginia (which are the subject of a separate class action).

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  • Joanne Loftus
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