More Builders See First-Time Home Buyers Returning

Several home builders presenting at JPMorgan Chase’s Homebuilding & Building Products Conference reported greater movement by first-time and entry-level buyers in recent months. The return of such buyers after years of dormancy is often cited as integral to boosting both home construction activity and the nation’s economic recovery. The 437,000 new homes sold in 2014 represented just 58.6 percent of the annual average since 2000. Meritage Homes stated at the conference that it will begin building more starter residences priced from the low $200,000s. Meritage, which has communities in nine states, has traditionally catered to more established, well-off buyers at an average selling price of $390,000. With regard to the entry-level market, Meritage CEO Steven Hilton says he does see it as “expanding.” He added, “We saw strong demand in that segment in the last quarter and even more so over the last two months.” Also at the New York conference, Ryland Group CEO Larry Nicholson confirmed that his company has seen the entry-level market “pick up a bit” of late across the country. He went on to project that entry-level buyers, who currently account for about one-third of Ryland’s sales, might grow to as much as 40 percent. Nicholson also remarked that entry-level buyers are realizing “that money isn’t going to get any cheaper, that pricing is not going to get any cheaper, and they’re comfortable that their job situation is stable.” | Read More