Tuesday, February 25, 2014

WHY ARE NEW HOMES GETTING SO BIG?


New post on Eye on Housing


 

Why are New Homes Getting so Big? Look at Who’s Buying Them

Preliminary data provided to NAHB by the Census Bureau on the characteristics of homes started in 2013 show the trend toward larger homes continued unabated last year, as did the share of new homes with 4+ bedrooms, 3+ full baths, 2-stories, or 3-car garages.  The average size of new homes started in 2013[1] was 2,679 square feet, about 150 square feet larger than in 2012 and the fourth consecutive annual increase since bottoming out at 2,362 square feet in 2009.
fig1New homes started in 2013 were also more likely to have additional features: nearly half, 48%, had 4 or more bedrooms; 35% had 3 or more full bathrooms; 22% had a garage for at least 3 cars; and 60% were 2-stories.  The share of new homes started with these features has been increasing consistently for 3 or 4 years, and the most obvious question is “why?” Why are homes getting this BIG?
fig2To get an answer, just take a look at WHO is buying new homes?  The typical new home buyer in recent years has been someone with strong credit scores and high levels of income.  To the first point, the graph below shows how the average credit rating of all US consumers has remained rather flat over the last few years (blue line), while the average credit rating of mortgage borrowers (red line) took a dramatic jump after 2007.  By 2013, the gap between the two measures was 58 points, compared to 33 points in the early 2000s.
fig3
To the second point, the graph below shows the rising trend in new home buyers’ income in recent years.  In 2005, the median income of new home buyers was $91,768.  By 2011, it had increased by more than 17% to $107,607.  It is not too surprising, therefore, to see home size and features continuing to trend upward, given that those buying new homes are precisely the kind of buyers who generally purchase large, feature-loaded homes.
fig4

[1] Preliminary data cover first half of the year.
Rose Quint | February 25, 2014 at 10:40 am | Tags: economics, home building, housing, housing economics | Categories: Data | URL: http://wp.me/pRufg-2B4

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.

Total Pageviews

For your live, local weather info below, just click on EDIT & enter the zip code that you want to know about. Our zip code at Ross Bridge is 35226.


All information is deemed reliable but not guaranteed.

Playlist


Get a playlist! Standalone player Get Ringtones

Followers

Blog Archive