New construction purchases by first-time homebuyers are growing, accounting for almost half of the 2021 new home market, according to recent data from the National Association of Home Builders/Wells Fargo Housing Market Index.
The index found first-time homebuyers account for 43% of the new home market this year, up from 32% in 2018. Additionally, builders reported more than 20% of their homes were sold to first-time homebuyers and 27% said more than half of their sales were also to first-time homebuyers.
Those figures come as no surprise to local agents. Jay McHugh, owner of LAER Realty Partners, said he’s seeing many new construction homes going under agreement with first-time homebuyers, as well as with step-up younger buyers.
“They do not want to fix any problems or have any of the challenges that come with older homes,” McHugh said. “In their mind, they would rather pay more and then enjoy their boat, ski, travel or home-based business, than have to worry about a roof leak, having no heat or having an old outdated kitchen to remodel.”
McHugh said it’s a sign of the times. “They’re under a time deadline and want it yesterday. It’s the microwave-oven rather than a four-hour dinner mentality,” he said.
Realtor Jill McTague of Deb on the Web Realty Group agreed.
“It’s truly the wanting everything right now,” she said. “They really don’t want to put the time in to do any work. They have no interest in doing home repairs, and no interest in a fixer-upper. Even older kitchens and baths, they don’t even want to see them. They don’t appeal to them.”
With interest rates still low, these buyers can afford new construction. It’s just what they prefer, McTague said.
“Especially with a lot of people working from home: The newer homes are designed with home offices, bigger spaces, and they’re open concept,” McTague said.