The Pricing of Housing and Mortgage Services for First-Time Versus Repeat Homebuyers

G. Stacy Sirmans () and Enrico J. Ferreira ()
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G. Stacy Sirmans: Department of Insurance, Real Estate and Business Law The Florida State University Tallahassee, Florida 32306-1042, http://www.cob.fsu.edu/
Enrico J. Ferreira: Department of Management and Finance Indiana State University Terre Haunte, Indiana 47809, http://web.indstate.edu/schbus/

Journal of Real Estate Research, 1995, vol. 10, issue 1, 115-127

Abstract: This 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).

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1995
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Citations: View citations in EconPapers (2)

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