The Pricing of Housing and Mortgage Services for First-Time Versus Repeat Homebuyers
AbstractThis study examines efficiency in the pricing of housing and mortgage services across first-time and repeat homebuyers. A logit model is used to test a number of variables for significant differences across first-time buyers and repeat buyers for a sample of brokered real estate sales. The results show that the housing market is somewhat less than completely efficient in providing its services. The logit results for the adjustable-rate mortgage segment show that first-time homebuyers are more likely to be associated with a higher sale price per square foot and higher discount points than repeat buyers. The results show that first-time homebuyers tend to be younger and have less household income than repeat homebuyers. For the full sample of data, the results show that higher sale price/square foot ratios and lower downpayment/sale price ratios are more likely to be associated with first-time homebuyers. For the fixed-rate mortgage segment of the data, the only distinguishing variables are downpayment/sale price and buyer age (both lower for first-time homebuyers). Type of buyer cannot be distinguished by sale price/square foot, contract interest rate, discount points, and other variables. For the adjustable-rate mortgage segment of the data, type of buyer can be distinguished by sale sprice/square foot (higher for first-time buyers), downpayment/sale price (lower for first-time buyers), and discount points (higher for first-time buyers).
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Bibliographic InfoArticle provided by American Real Estate Society in its journal Journal of Real Estate Research.
Volume (Year): 10 (1995)
Issue (Month): 1 ()
Contact details of provider:
Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
Web page: http://www.aresnet.org/
Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
Find related papers by JEL classification:
- L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
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- N. Gregory Mankiw & David N. Weil, 1990.
"The Baby Boom, The Baby Bust, and the Housing Market,"
NBER Working Papers
2794, National Bureau of Economic Research, Inc.
- Mankiw, N. Gregory & Weil, David N., 1989. "The baby boom, the baby bust, and the housing market," Regional Science and Urban Economics, Elsevier, vol. 19(2), pages 235-258, May.
- Joe Peek & James A. Wilcox, 1991. "A real, affordable mortgage," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 51-66.
- D. Duffy & M.J. Roche, 2005. "Heterogeneous Homebuyers, Mortgage Choice and the use of Mortgage Brokers," Economics, Finance and Accounting Department Working Paper Series n1520205, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
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