Portrait of the modern American home buyer
This summer, the National Association of Realtors (NAR) surveyed 5,708 home buyers and sellers for their 2011 National Association of Realtors® Profile of Home Buyers and Sellers. The report reveals that the demographics of home buyers and types of homes being sold has shifted dramatically this year, mostly due to job instability and insecurity as well as tightened lending.
Now, more buyers are married, older and have higher incomes, the portrait of the traditionally stable buyer. The report also revealed a striking lack of diversity in the home buyer pool and that 85 percent of American buyers are Caucasian, and almost all were born in America and primarily speak English.
Where did these buyers come from?
Now that we know the demographic makeup of the average American buyer, what was their prior living situation? The NAR reports that nearly half of all home buyers owned their previous residence prior to buying a new home, a substantial jump from 2010’s 35 percent. NAR says this increase is because of first time buyers which last year accounted for half of all buyers but now only account for roughly a third.
Home buyers were also renters in their previous living situation, with 42 percent of all people surveyed saying they rented an apartment or house immediately prior to buying their home.
Although 21 percent of repeat buyers did rent before purchasing their most recent home, renting was predictably most common with first time home buyers.
Also not a surprise, couples that are not married were the most likely to be renters before buying a home. Single people were more likely (than dating couples or married couples) to live with their parents, friends or other relatives before buying a home.
Although the report does not highlight the historic rise of multi-generational housing, it is our contention that a substantial number of Americans are simply living at home longer with parents, or moving back in with parents, while families are also moving in together as the economy continues to suffer. For right now, it appears that the ratio of previous renters to previous owners is close to 50/50.