There is optimism in the air when it comes to the return of the first-time homebuyer, especially after KB Home released its fiscal second-quarter earnings.
But according to Wall Street Journal real estate reporter Kris Hudson, “there is cause for optimism in that regard, but it is heavily muted optimism.”
In its quarter ended May 31, 56 percent of KB Home’s sales were to first-time homebuyers, a slight increase from 50 percent in its first fiscal quarter and an even smaller increase from 54 percent last year.
“This data point suggests that we may be at a turning point in this recovery as household formation has been the missing link,” KB Home Chief Executive Jeff Mezger said Friday on a call with investors.
But Hudson writes that the “extent to which first-time homebuyers are starting to come back is an open question.” NAHB data shows that first-time buyers will account for only 18 percent of new-home sales this year, compared to the 25 percent to 27 percent in the period between 2001 and 2007.
Additionally, Commerce data show that most of the new households formed in the past year went to rental apartments instead of for-sale housing.