Do First Time Home Buyers in the U.S. Improve Their Neighborhood Quality?

This study examines how becoming a home buyer affects the quality of the neighborhood in which lower-income buyers live. Three questions are addressed: Do lower-income buyers buy in higher quality neighborhoods than the ones in which they rented? Are lower-income buyers locating in higher quality neighborhoods than a comparison group of continuing renters? Are the neighborhoods of new buyers improving or deteriorating relative to those of continuing renters?

Results indicate that home buyers located in neighborhoods that were similar in quality to those in which they rented. Continuing renters, however, improved the quality of the neighborhoods between the first and second surveys, while home owners did not. Finally, while the neighborhoods in which new buyers lived are improving, they are doing so at a slower rate than both the neighborhoods from which they moved and those of the continuing renters.