CHICAGO - Middle-income Americans were less worried about losing their jobs last year and more inclined to trade up to bigger homes, a new survey of home sales shows.
"This was a very good year. There were fewer headlines about corporate America cutting back and a much higher level of consumer confidence," said John Pfister, vice president of Chicago Title and Trust Co., the appraisal and title insurance company that conducted the survey.
"In general, people were looking for bigger and better homes."
People earning between $41,000 and $60,000 annually represented 24.6 percent of repeat home purchasers, Chicago Title reported in its 21st annual survey of who's buying homes in America.
The number of repeat buyers rose to 55.3 percent from 53.8 percent in 1995, Chicago Title said. The number of first-time buyers declined for the first time in several years, from 46.2 percent to 44.7 percent.
Chicago Title surveys 18 major markets across the country, accounting for one-third of all American home sales.
The National Association of Realtors on Monday reported sales of existing single-family homes rose 7.5 percent last year with help from sharp gains in consumer confidence.
"It's been a very beckoning environment for a person who wanted to live a little better, and the middle-class have had a particularly good year," said economist Robert Dederick at Northern Trust Co.
`Job numbers increased and income went up, while inflation was well in check," Dederick said Tuesday. "And some of them probably made some profits in the stock market."
Minority and immigrant populations contributed significantly and will contribute even more in coming years to rising home sales, said William A. Strauss, senior economist at the Federal Reserve Bank of Chicago.
"Immigration to some extent came be viewed as the white knight of the housing industry," Mr. Strauss said in an outlook on 1997. "There was a large influx of immigrants approximately 15 years ago, so the impact of this group on the housing market should begin to be felt."
Chicago Title for the first time also delved into the race and gender of home purchasers, finding minorities accounted for 18.5 percent of purchases.
In 1996, 72.7 percent of all buyers described as African-American were purchasing homes for the first time; 71.7 percent for Asians and 63.5 percent for Hispanics.
The pattern, combined with studies indicating the minority population will grow rapidly over the next 15 years, suggests minorities will become increasingly more influential in the first-time buying market, Pfister said.
The renewed home buying pushed prices up 3.7 percent last year compared to 1.6 percent a year before.
The overall average home price rose to $187,800 from $180,200 and the average down payment fell to 19.5 percent of the sale price from 20.4 percent, Chicago Title said.