Two key segments of buyers who have been notably absent in recent years in the housing market are returning in force: First-time home buyers and single women.
The share of sales to first-time home buyers surged to 35 percent this year, the highest since 2013 (when their share reached 38 percent).
It also marks a reversal to a 30-year low set in 2015, in which first-timers comprised 32 percent of the market, according to the National Association of REALTORS® newly released 2016 Home Buyer and Seller Profile.
Those under the age of 35 now make up 61 percent of first-time buyers, NAR reports.
Women buyers are increasing their share too. Female home buyers now make up double the amount of sales than men (17 percent versus 7 percent). Women buyers comprise their highest share in the market since 2011, NAR’s data showed.
Here’s a snapshot with more details about today’s home buyers and sellers, according to NAR’s 2016 Home Buyer and Seller Profile:
- First-time buyers: The typical first-time buyer had a higher household income ($72,000) than last year ($69,400). They also purchased a slightly larger home this year (1,650-square-feet versus 1,620-square-feet in 2015) and a pricier home too ($182,500 versus $170,000 in 2015).
- Debt woes: Forty percent of first-time buyers are saddled with student debt, and 26 percent say that saving for a down payment on a home was the most difficult of the process. The typical amount of debt they owe is $26,000. Fifty-five percent of first-time buyers said student loans delayed them saving for a home purchase. The median delay in saving due to student loan debt was 3 years.
Leverage these findings: How you can use the 2016 Home Buyer and Seller Report to your business advantage.
- Down payments: Down payment sizes have held mostly steady in recent years. First-time home buyers came with a median down payment of 6 percent while repeat buyers tended to put down 14 percent down. Eighty-eight percent of buyers financed their purchase (59% conventional; 24% FHA; 12% VA loans).
- Buyer search resources: The most popular search resources buyers used for their house hunt were: online (95%), real estate agents (92%), mobile/tablet apps (72%), and open houses (50%). A record 51 percent of home buyers reported finding the home they purchased online. Still, 90 percent who used the Internet in their house-hunt still said they used a real estate agent to buy the home.
- Housing preferences: The most common housing type continues to be a detached single-family home, three-bedrooms and two bathrooms, and one located in a suburban area. Eighty-three percent of buyers said they preferred a single-family home, followed by 7 percent who preferred a townhouse or row house and 4 percent a condo. Fifty-four percent of buyers also preferred a suburb or subdivision versus 19 percent who wanted to move to a small town, 14 percent to an urban area, 11 percent to a rural area, and 2 percent to a resort or recreational area. The median distance buyers moved to a new home was 20 miles; 72 percent stayed in the same state. First-time home buyers purchased a home for an average of $182,500 while repeat buyers’ purchase averaged $250,000.
- Home seller gains and motives: Sellers had a median equity gain of $43,100 (compared to $40,000 in 2015). That marks an average 24 percent increase over their original purchase price. More sellers opted to trade up (44%) compared to last year (42%).
- Customer loyalty: Eighty-five percent of sellers said they would definitely or probably use their real estate agent again or recommend him or her to a friend.
By Melissa Dittmann Tracey, REALTOR® Magazine