Lower Interest Rates Fuel Significant Increase in Home Sales
and Attract First-Time Buyers
CHICAGO, Jan. 29 /PRNewswire/ -- New home purchases by larger numbers of
single, never-married and minority buyers drove the 4.1 percent increase in
home sales during 1997 in 20 representative U.S. markets, according to the
22nd annual Chicago Title and Trust Co. (CT&T) survey, "Who's Buying Homes in
America." The number of single, never-married buyers grew 28.9 percent in
1997. In addition, minority buyers purchased 27.7 percent more homes last
year.
The 1997 survey was expanded to include Houston and Miami for the first
time. "As the housing market continues to evolve, CT&T recognized the need to
broaden the 'Who's Buying Homes in America' survey. By including Houston and
Miami this year, we anticipate the data will be more useful to a wider range
of groups across the country," said John Rau, president and chief executive
officer of CT&T.
Comparative data on home buyer racial origin available for first time
CT&T's 1996 survey provided the first insight into the racial origins of
home buyers. Comparative data in the 1997 survey revealed that each minority
group increased its respective share of the home sales market. Also on the
rise were the numbers of first-time and repeat minority home purchasers in
1997. Minorities represented 28.4 percent of first-time home buyers (compared
with 24.8 in 1996) and 17.8 percent of repeat buyers (compared with 13.3
percent in 1996).
"The dramatic increase in single and minority buyers is due in large part
to 1997's low interest rates and higher consumer confidence," said John
Pfister, who directs CT&T's marketing research. "Minorities accounted for
27.7 percent of total home buyers in 1997, compared with 18.5 percent in
1996." This increase was evident in most of the 20 major urban markets
surveyed by CT&T.
Number of married home buyers decreases
"While 1996 saw a return to the housing market by larger numbers of
married home buyers, this was not the case in 1997," said Pfister. "The 1995
survey revealed that 66.4 percent of the total number of home buyers were
married; that number rose to 70.2 percent in 1996 and then dropped again to
only 64.7 percent last year."
The 1996 survey was the first to present a more in-depth look at the
marital status and gender of home buyers, and last year's survey provided the
first look at comparative data.
Non-married males led the categories of single home buyers with an
increase to 19.1 percent from 14.9 percent a year earlier. The number of non-
married females increased slightly, rising 1.3 percent to 16.2 percent from
14.9 percent the previous year. Among non-married home buyers, 57.6 percent
of the males and 56.9 percent of the females were first-time buyers.
The national pricing spectrum
The median home price in the markets surveyed rose 4.2 percent to $159,700
from $153,200 in 1996. The average home price, however, did not keep pace
with the median, rising only 2.4 percent to $192,300 in 1997, from $187,800
the previous year. This difference was most likely due to greater numbers of
home purchases in the center of the pricing spectrum, according to Pfister.
Once again in 1997, San Francisco was the nation's costliest housing
market for both first-time and repeat buyers, with the highest median home
price ($289,700), the highest average home price ($326,000) and the highest
average monthly mortgage payment ($1,632). Orlando, Fla., reported both the
lowest median home price ($103,300)and the lowest average monthly mortgage
payment ($841), while Houston had the lowest average home cost ($116,900).
Viewed as a percentage of after-tax income, New York City had the highest
average monthly payment (37.5 percent), and Minneapolis/St. Paul had the
lowest percentage (29 percent).
Atlanta home buyers again led the country with the highest percentage of
new home purchases (41.1 percent), and Los Angeles home buyers purchased the
highest percentage of previously owned homes (92 percent). Dallas/Fort Worth
had the most married buyers (76.8 percent), while San Francisco had the least
(43.3 percent). Dallas/Fort Worth also had the largest number of home buyers
choosing conventional fixed-rate mortgages at 82.3 percent, and San
Franciscans, as usual, picked adjustable- or variable-rate mortgages more
often than buyers in other markets at 40.4 percent. San Francisco boasted the
highest average household income for both first-time ($78,500) and repeat
($95,400) home purchasers. Orlando had the lowest household income in both
categories, at $45,500 and $63,400, respectively.
Impact of family income on home buying
Household income for all buyers increased during 1997, rising 3.6 percent
to $66,100 from $63,800, providing more Americans with the means to buy homes.
This factor contributed to the 4.1 percent increase in home sales in the 20
markets surveyed by CT&T.
The Chicago Title and Trust Family of Companies (CT&T Family) is the
source of real estate services, providing title insurance, escrow and closing
services, as well as valuation, credit and flood certification products
through a network of more than 300 offices and approximately 3,700 agents
nationwide. The CT&T Family -- including Chicago Title Insurance Co., Ticor
Title Insurance Co. and Security Union Title Insurance Co. -- issues
approximately one in every four title insurance policies in the United States
with annual gross revenues in excess of $1.3 billion. Chicago Title and Trust
Co. also is the parent company of Chicago Title Flood Services Inc. of
Arlington, Texas; Chicago Title Credit Services Inc. of Kingston, N.Y.; and
Chicago Title-Market Intelligence Inc. of Hopkinton, Mass.
SOURCE Chicago Title and Trust Co.
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Related links:
http://www.ctt.com
CONTACT:
Stephen Flanagan, 312-223-2959, or Kathy
Graves, 312-223-2462, both of Chicago Title and Trust Co.
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