April is New Homes Month for the housing industry but recent data from the American Housing Survey (AHS) shows that nearly two-thirds of first-time homebuyers move for “a better home.” That was the top reason those surveyed gave for moving, followed by household formation, and a better neighborhood.

First-time homebuyers counted for 37 percent of those who purchased homes in the two years preceding the release of the 2017 AHS, down from 39 percent from the previous release, in the 2015 AHS. A factor in that drop may be that the median price of homes purchased by recent homebuyers has increased by 10 percent in that same period of time.

“First-time homebuyers are eager to move to better homes and neighborhoods, yet home prices remain a challenge,” said National Association of Home Builders (NAHB) Chairman Greg Ugalde, a builder and developer from Torrington, Conn. “Public policies and incentives that support home affordability can help buyers find a home that fits their lifestyle and family.”

The NAHB points to a complexity of factors that builders are facing, which contribute to higher home prices and the cost of housing. The supply of land; federal, state and local regulatory requirements; and a shortage of skilled labor are just some of the obstacles facing those who wish to build affordable housing.
The demographics of homebuyers remained steady from 2015: the typical home buyer was 40 years old, with first-time buyers had a median age of 32. Twenty-seven percent of recent homebuyers were racial or ethnic minorities, about the same as in the 2015 AHS.

Last week, the Federal Reserve indicated it doesn’t anticipate any rate increases in 2019 and a single rate hike in 2020, which the NAHB believes will help housing markets this year.

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