On average, 40% of builders’ single-family home sales so far in 2024 have been made to first-time home buyers, according to the most recent NAHB/Wells Fargo Housing Market Index survey (HMI). That share has doubled since 2016, when only 19% of builders’ sales went to first-time buyers.
Our limited time-series on this topic in the HMI survey indicates that first-time home buyers purchased an increasing share of new homes between 2016 and 2021, when the proportion rose from 19% to 43%. Unfortunately, the series has a two-year hiatus (2019 and 2020) when no data are available.
Since 2021, however, growth in the new home first-time buyer share has stopped. After holding steady at 43% in 2022, the share has lost ground in each of the past two years, slipping to 42% in 2023 and then to 40% in 2024.
More granular analysis shows there is a direct correlation between the first-time buyer share and builder size. In other words, the larger the builder, the more likely it is for a higher share of its sales to go to people buying a home for the first time.
To be more precise, builders with 1 to 5 single-family starts a year reported that only about 18% of their sales so far in 2024 have gone to first-time buyers. That average increases to 21% among builders with 6 to 24 starts, to 34% among those with 25 to 99 starts, and reaches 44% among builders who start at least 100 homes a year.
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Start by setting a target date for construction, then give the homeowners clear instructions on how to prepare for their remodel. “Depending on the project, a homeowner may need to remove all items from kitchen or bathroom cabinets, or any other furniture that we’ll need to move to lay floor tile, for instance,” Palacio says.
It may be helpful to have a pre-construction meeting with the client, during which you discuss safety concerns, noise tolerance and limited access to living space. “We talk about where they are going to live and work during our planning process, and about how they will prepare to pack and move their belongings,” Bettinger says. Her team also sends clients a document with more details on how to prepare for construction.