The share of first-time buyers remains below historical averages, but an increasing number younger adults are starting to say goodbye to renting. Developers are taking note.
According to the Los Angeles Times, the share of first-time buyers of previously owned homes increased from 32 percent in June 2015 to 35 percent in June 2016 (per the most recent data available). In California, 32 percent of houses and condos were purchased by a first-timer in the second quarter of 2017, up from 29 percent the year before.
Builders are starting to capitalize on the opportunity, especially in areas where housing costs are a bit cheaper. For example, San Bernardino and Riverside counties in Southern California saw 9,269 permits for new homes in the first seven months of this year, up 58 percent from the year before.
“They are all shifting their business a little more to first-time buyers, whether along the coast or inland,” John Burns, a well-known national real estate consultant, said of California builders. “That is where the demand is.”
The LA Times profiled a couple who are moving from a $1,644 a month, one-bedroom apartment in Orange County to a $430,000 house in the Riverside County city of Murrieta. For them, a big new house is better than renting, even with a much longer commute.
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