Most new construction home buyers are repeat buyers — nearly 3 in 4 (71%) — so when it comes to deciding how to finance their home, they’re experienced, confident and prosperous enough to call the shots.
The Zillow Group New Construction Consumer Housing Trends Report 2018 explores data and insights on buyers and how they search for, think about and buy a new construction home in America today. It’s based in part on the Zillow Group Consumer Housing Trends Report 2018 and includes data from two supplemental studies that dive into why home shoppers do or don’t choose new construction and how satisfied they are with the new construction home-buying process.
Using data from the report, here’s what we learned about how new construction buyers approach their home purchase.
Mortgage, shmortgage
Almost a third of new construction buyers (29%) paid in full for their home — meaning they did not get a mortgage or home loan — which is significantly higher than existing home buyers (22%).
More than half (55%) of new construction buyers who financed their home were not at all concerned about qualifying for a mortgage, which is significantly higher than 39% of existing home buyers who were not at all concerned about qualifying.
Among buyers who obtained a mortgage, new construction buyers put significantly more down to purchase their home: More than half (52%) of new construction buyers put down 20% or more toward the purchase of their home, compared to 42% of existing home buyers.
Repeat buyers with a big advantage
New construction buyers may have larger down payments due to the fact that they are more likely to be repeat buyers who are also selling a home. Among new construction buyers who used financing to purchase a home, 45% used funds from the sale of the previous home to fund at least a portion of the down payment, compared with 38% of existing home buyers. Proceeds from the sale of a previous home account for a significant share of the average new construction buyer’s down payment — 29% compared with 17% for the average existing home buyer.
Higher income, higher education
Today’s new construction buyer is more affluent in general. Nearly half (44%) of these buyers earn an annual household income of $100,000 or more compared to slightly less than a third (31%) of existing home buyers who bring in six figures or more. Exactly half (50%) of new construction buyers have a college education or higher.
Nearly a third (30%) of new construction buyers bought a home that was higher than their initial budget, which is significantly higher than existing home buyers, 22% of whom went over budget.
Today’s new construction buyer knows what they want from their next home and need a trusted guide on their journey to finding it. Learn more about working with them by downloading the full report and visiting the Zillow Group New Construction Resource Center. To learn more about how you can leverage Zillow Group’s industry-leading data to market your homes online, visit our advertising page.
