Messenger - Vol. 1, No. 3, Page 9 Spring 1992 Dream house may be just a dream Jeffrey Raffel, professor of urban affairs and public policy, had little trouble finding funding sources for his study of home buyers in New Castle County, Del. The county's Planning Department and Department of Community Development and Housing, as well as a number of area agencies and organizations, were working on developing incentives for first-time home buyers, hoping to give the ailing housing market a shot in the arm. But, they kept having difficulty finding the information they needed. When Raffel approached the county with a proposal to fund a general study of home buyers, the planners asked him to narrow the focus and A Profile of First-Time Home Buyers in New Castle County was commissioned. Interest was so great that Raffel received support from a wide variety of groups, including two New Castle County school districts, the Delaware Homebuilders Association, the State Housing Authority and the state legislature. The facts and figures that the planners wanted are not readily available even on a national level. In fact, Raffel said that the U.S. Census Bureau produced its first-ever, first-time home buyers report just as his was in the production stage. Raffel and Gi-Yong Yang, a graduate student, mailed surveys to almost 8,000 households that had purchased homes in New Castle County in 1988. They received 2,788 responses. They found that 31 percent of all home buyers in New Castle County in 1988 were buying homes for the first time. Of those, half were between the ages of 20-29, 93 percent were white, 64 percent were married and 62 percent held white-collar jobs with an average income level of $42,190. Only 4 percent of the county's first-time home buyers made below $20,000. When compared to the U.S. Census Bureau's newly compiled figures, New Castle County's first-time home buyers were comparable in age and marital status, but that's where the similarities end. Delaware's first-time home buyers made more money and were less likely to be black or have children at home than those in the nation. Nationally, 19 percent of first-time home buyers make under $20,000, while in Delaware that figure is 4 percent. All of that being true, the report states that "63 percent of the households in New Castle County could not afford a median-priced home and 47 percent could not afford the least-expensive, new construction. Of total households, 38 percent could not afford a $20,000 mobile home or a $420 per month rent. The affordability issue is expected to continue unless the gap between wages and housing costs is lessened." The average sale price of a home purchased by a first-time buyer in New Castle County was $75,858. First-time buyers were more likely to purchase less spacious, attached and multiple family dwellings in the city of Wilmington or New Castle areas and were less likely to be as satisfied with their homes or locations. Based on data compiled by the University's Bureau of Business and Economic Research, the report concludes that, despite the economic growth Delaware experienced in the 1980s, real income for New Castle County residents declined 10 percent. For renters, the loss in buying power was 25 percent, partially as a result of rent increases. That loss of buying power, coupled with a 45 percent hike in the value of owner-occupied housing, has just about priced many first-time buyers out of the market. "Renters who might become first-time home buyers have become increasingly less able to afford the transition to home ownership. The affordability gap is clearly increasing," the survey concludes. -Barbara Garrison