Today's affluent homeowners are willing to travel farther to work to get the larger, more elaborate houses they want when they move up from their current ones, according to yet another survey released at the convention. This one is based on 1,776 homeowners who have purchased houses insured by the Home Owners Warranty (HOW) program since 1980.
Dream Seems Attainable
These affluent baby-boomers plan to buy a house with about 2,360 square feet--about 30% larger than their current homes--with a median price of $125,000. About 16% plan to spend $200,000 or more for that move-up dream home. With a median household income of $53,412--20% of the respondents made $75,000 or more--the dream of moving up seems attainable.
Alan Greenspan, chairman of the Federal Reserve Board, cited and praised the stability of the past six years in the economy in general and the housing industry in particular in a speech to the association's board of directors on the final day of the convention.
Greenspan said the past six years have seen single-family starts at or slightly above the 1 million per year mark, consistent with demographic trends, such as household formations, which are averaging 1.5 million a year.
Most of Greenspan's half-hour address was positive, but he also cited the nation's declining home ownership rate--this decade is the first to see the ownership rate decline (currently about 64% contrasted with the peak of 65.4% in 1981)--and the sharp division between the generally affluent homeowners and all too often poor renters.
Renters typically earn less than 60% of what homeowners make and the gap is widening, he said. Builders must address the problems of affordability, including constructing more affordable rental units in the face of tax laws that discourage such construction, but Greenspan promised that the Federal Reserve Board will do its best to ensure continued financial stability.
The Fed chairman said that major growth areas of the building industry in the next few years will be remodeling and construction of move-up houses, along with a growing market share (currently about 5%) in the second-home market.