CHICAGO -- Minorities and singles cashed in on a vibrant economy, high consumer confidence and low mortgage rates to help boost home sales 4.1 percent in 1997, a new survey found.
While married and white buyers continued to make up the bulk of new and existing home sales, singles and minority buyers showed double-digit gains and are poised to show "spectacular" influence, the study's author said.
"We had expected the percentage of minorities and single buyers to rise, but certainly not as much as they did," said John Pfister, vice president of Chicago Title and Trust Co., the appraisal and title insurance company that conducted the survey.
"With consumer confidence shooting up more than 20 points, that made a big difference. A lot of minorities for a long, long time didn't think they could afford a house, and now we have the type of economy where catchup can -- and is -- occurring," he said.
Sociologists and economists have noted for the past few years that minorities, particularly blacks and Hispanics, will have increasing buying power in America amid a shift in population trends that is leading to growing prosperity for those groups.
Minority buyers accounted for 28.4 percent of first-time home sales, up from 24.8 percent in 1996, Chicago Title found in its survey of 20 major markets across the country, accounting for one-third of all American home sales.
The number of minorities buying homes overall rose 27.7 percent over the year earlier. The number of single buyers rose 28.9 percent and the number of divorced, separated or widowed buyers jumped 15 percent. The number of white buyers fell 1.3 percent and the number of married buyers fell 4 percent.
The 4.1 percent increase in total home sales mirror those released last month by the National Association of Realtors, which found sales of existing single-family homes rose a record 3.12 percent to 4.21 million homes last year. It was the best year since the group began tracking sales in 1968.
The sales spree primarily reflects a booming job market and low mortgage rates, economists said. The unemployment rate hit a 24-year low of 4.9 percent last year and inflation-adjusted wage gains topped 2 percent, the best since before the 1990-91 recession. As a result, consumer confidence soared to a 28-year high.
"Earnings growth has seriously outpaced the cost of inflation in an economy that has been extremely vibrant, with a very low jobless rate," Northern Trust economist Robert Dederick said. "The banks, meanwhile, have been very much actively pushing lending to minority groups and lending into the inner-cities, and that's beginning to show up in the overall numbers."
The survey found people had more money in their pockets last year.
Middle-Americans -- people earning between $40,000 and $60,000 annually -- represented 25.6 percent of all home purchasers, down from 27.9 percent a year earlier, Chicago Title reported in its 22nd annual survey of who's buying homes in America. Those earning more than $60,000 were 45.8 percent of all buyers, up from 44.7 percent in 1996.
The number of repeat buyers fell to 53.2 percent from 55.3 percent in 1996 as many opted to refinance existing homes, Chicago Title said. The number of first-time buyers rose to 46.8 percent from 44.7 percent.
The median price of homes rose to $159,700 from $153,200 in 1996. The average age of first-time buyers was 32, while the average age of repeat buyers was 41.