Home Builders See Increase In First Time Buyers

Builder magazine (the official publication of the National Association of Home Builders) is reporting some softening in the high end home market, but is seeing the opposite at the entry-level end of the spectrum. Described as the “return of the first time buyer,” sales activity points to good news for home builders and first time home owners as well.

Builder Online reports:

Anecdotal evidence suggests that the awaited “return of the first-time buyer” to the housing market is coming to pass. Here’s a few flashes we’ve picked up, in Las Vegas and San Francisco.

  • First-time buyer demand has picked up significantly in the Las Vegas market, according to a number of executives we heard from there. A fits-and-starts mode, where strength in one segment gains for a burst, while another segment slows down, has in very recent weeks shed light on momentum in the lower price tiers, among first-timers. Meanwhile, builders have detected a slowing in demand for their higher-end offerings in the market.
  • D.R. Horton’s torrid roll-out of its Express brand of entry-level homes has now expanded to 44 markets in 14 states. We’re hearing that Horton divisions nationwide are undergoing a re-tool as on-the-ground operations reduce and streamline plans around only very slight regionalizations of the basic Express model line, and work hard at driving the per home gross margins toward D.R. Horton’s expected high-teens level of performance.
  • Remember now, Horton is on pace to delivering on a promise to stakeholders that it would grow its volume in 2015 by 27%, or 8,000 homes, to a total northward of 36,000 homes. The rough-math of about one-in-five deliveries being against the Express line would mean 7,200 of the entry-level brand. That’s at current run-rates, not even reflecting its planned growth as part of the Horton mix. That figure is bigger than 90% of the other home builders in the country.

>> read more at builderonline.com

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