First-time buyers, single women get traction in 2016
WASHINGTON – Oct. 31, 2016 – The quickening pace of home sales over the past year included a small rebound from two key segments of buyers missing in action in recent years: first-time buyers and single women.
The just-releasedNational Association of Realtors®' annual Profile of Home Buyers and Sellersalso found that for-sale-by-owner transactions (FSBOs) hit an all-time low of 8 percent for the second straight year – almost 90 percent of all respondents worked with a real estate agent to buy or sell a home. The survey's results represent owner-occupants and do not include investors or vacation homes.
First-time buyers After slipping for three straight years, the share of sales to first-time home buyers ticked up to 35 percent, the highest since 2013 (38 percent) and a revival from the near 30-year low of 32 percent in 2015. In the 35-year history of NAR's survey, the long-term average is 40 percent.
"Young adults are settling down and deciding to buy a home after what was likely a turbulent beginning to their adult life and career following the Great Recession," says Lawrence Yun, NAR chief economist. "Demand increased over the past year because of a robust job market for those with a college degree and renter fatigue at a time when homeowners continue to see their equity rise."
Two out of three (67 percent) of first-time buyers said their top reason for buying was "a desire to own a home of their own," up from 64 percent in 2015 and 53 percent in 2014.
"Even with the affordability challenges many buyers face, the allure of homeownership is not lost among the younger generation," adds Yun. "Those under age 35 made up 61 percent of first-time buyer transactions."
However, Yun says the uptick in new homeowners, while encouraging, is still subpar as a piece of the total market for 18- to 35-year-olds due to 1) a lack of affordable new and existing inventory, 2) home prices in many markets that have risen far above wages, and 3) the difficulty saving for a downpayment due to rising rents and student debt.
"First-timers' ability to enter the market more convincingly over the next year greatly depends on supply improvements at the lower end of the market, and if wages can finally awaken from their sluggish pace of growth," says Yun.
Single female buyers Married couples once again made up the largest share of buyers (66 percent) and the highest income ($99,200). However, the survey revealed that single women made up more of the buyer pie than in recent years (based on household composition). After falling to 15 percent of buyers a year ago, which tied the lowest share since 2002, single females represented 17 percent of total purchases – the highest level since 2011 at 18 percent.
"Despite having a much lower income ($55,300) than single male buyers ($69,600), female buyers made up over double the amount of men (7 percent)," says Yun. "Single women for years have indicated a strong desire to own a home of their own, as well as an inclination to live closer to friends and family. With job growth holding steady and credit conditions becoming somewhat less stringent than in past years, the willingness and opportunity to buy is becoming more feasible for many single women."
The median age of first-time buyers in this year's survey was 32, matching the all-time high last set back in 2006, and up from 31 the past five years. The typical first-time buyer had a higher household income ($72,000) than last year ($69,400) and purchased a slightly larger home (1,650-square-feet; 1,620-square-feet in 2015) that was more expensive ($182,500; $170,000 in 2015).
The typical repeat buyer was 52 years old (53 in 2015), earned $98,000 ($98,700 in 2015) and purchased a 2,000-square-foot home (2,020 square-feet in 2015) costing $250,000 ($246,400 in 2015).
The home search Once again, the two most popular resources for home buyers are the Internet (95 percent) and real estate agents (92 percent). Despite a record-high 51 percent of buyers saying they found the home they purchased online, most buyers who used the Internet still ended up purchasing their home through an agent (90 percent).
Homebuyers increasingly use mobile devices and tablets, and 72 percent used at least one in the latest survey, up from 61 percent a year ago and 45 percent in 2013 – and most (58 percent) said this year that they found the home they eventually purchased on a mobile app.
"Regardless of the plethora of online resources readily available at the click of a mouse or the swipe of a thumb, consumers serious about buying a home continue to seek the expertise and market insights that only a Realtor can provide," says Salomone.
Finding a Realtor Feedback from sellers underscored once again that referrals and repeat business remain a large source of new opportunities for real estate agents. Nearly two-thirds of responding sellers either found their real estate agent through a referral by a friend, neighbor or relative; or they used their agent from a previous transaction.
Additionally, 85 percent of sellers indicated that they would definitely or probably use their agent again or recommend him or her to others.
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