Former Renters Are in the Market to Buy, WSJ

New York, NY, May 12, 2017-“First-time buyers are rushing to buy homes after a decade on the sidelines, promising to kick a housing market already flush with luxury sales into higher gear,” according to an article in the Wall Street Journal (WSJ) called Generation of Renters Now Buying.

The article asserts that while tracking home sales to a particular age group is hard, a series of data points indicate that young people are ready to buy homes. These data points include that the number of new-owner households was double the number of new-renter households in the Q1 2017, that the share of first-time buyers is creeping back toward the historical average, and that mortgages for first-timers are on the rise.

“In a shift, new households are overwhelmingly choosing to buy rather than rent. Some 854,000 new-owner households were formed during the first three months of the year, more than double the 365,000 new-renter households formed during the period, according to Census Bureau data, and, in addition, it was the first time in a decade there were more new buyers than renters, according to an analysis by Trulia.

As this happens, home builders are beginning to shift towards production of homes at lower price points. “In the first quarter of this year, 31% of the speculative homes built by major builders were smaller than 2,250 square feet, indicating they were in the starter-home range, according to housing-research firm Zelman & Associates. That is up from 27% a year ago and 24% in the first quarter of 2015.”