UpDate - Vol. 11, No. 28, Page 2
April 23, 1992
First-time county home buyers profiled in study

     At a news conference in his office last Thursday, New Castle
County Executive Dennis Greenhouse announced the results of a
University of Delaware survey of first-time home buyers in New Castle
County and praised the University for cooperating with the county to
help resolve a pressing economic problem.
     He explained that Jeffrey Raffel, professor of urban affairs and
public policy, had approached the county with a proposal for a study
of New Castle County home buyers. Greenhouse said that county planners
were having trouble finding information that would help them develop
programs for new buyers. When Raffel approached planners, they asked
him to limit his survey to first-time home buyers. Raffel agreed and A
Profile of First-Time Home Buyers in New Castle County was
commissioned.
     The facts and figures that planners wanted are not readily
available even on a national level. Raffel said 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, 62 percent held white-collar jobs and their average income
level was $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 had a similar number of first-time home buyers who
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.
While nationally, 19 percent of first-time home buyers make under
$20,000, 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
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 finds 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