The 2015 National Association of Realtors Profile of Home Buyers and Sellers has just been released, and it is filled with mixed news. The share of first time buyers is slipping from historic averages which is concerning, but home values are increasing and sellers are walking away with more cash.
But what of buyers? Let’s dig a little deeper into the profile on buyers.
Regarding first-time buyers, they made up 32 percent of all home buyers, down from 33 percent last year. It doesn’t sound like a major shift, but it is part of an ongoing trend.
The report notes that the historical norm for primary residence buyers is 40 percent of the market.
This report shows the lowest share of first time buyers, second only to 1987 when the share was 30 percent of first-time home buyers. Due to the lower share of first-time buyers the data shows a market with a higher share of married couples who have higher household income than seen in the last few reports.
Profiling the typical buyer
According to NAR, the typical buyer was 44 years old and had a median household income of $86,100. The median household income for 2014 rose again this year to $86,100 from $84,500 in last year’s report.
“First-time home buyers reported a median income of $69,400 and $98,700 for repeat buyers,” according to the survey. “Married repeat buyers have the highest income among all buyers and that figure jumped up this year to $108,600.”
All the single ladies
Notes the report, “From 2005 to 2010, single females made up one fifth of the market share. The continued drop of single females reflects the dual incomes from married couples had stronger purchasing power than single buyers.”
Married couple buyers are on the rise, accounting for 67 perfect of buyers this year. Only 15 percent were single females, 9.0 percent were single males, and 7.0 percent were unmarried couples.
Veterans and homeownership
This report indicates that of this year’s buyers, 3.0 percent are active-duty service members.
Nearly one in five home buyer this year is a veteran, pointing out the need for real estate professionals to be well versed in financing options available to a large portion of home buyers.
Race and sexuality: disproportionate numbers
Similar to previous years, 85 percent of recent home buyers identified their ethnicity as white, which of course is not a proportionate reflection of our nation’s ethnic makeup.
This is particularly disconcerting given the recent report that blacks purchasing homes between 2005 and 2007 lost an average of $16,911 in net worth, while whites who bought a house during the same period gained $24,000.
Also not reflective of our nation’s makeup is sexuality. The majority of buyers identified as heterosexual (90 percent), while only 3.0 percent identified as gay or lesbian, 1.0 percent bisexual, and 7.0 percent abstaining from answering.
Identifying these disproportionate numbers is identifying opportunity in our nation to usher under-served groups into homeownership, which most surveyed believe is the best possible investment, even over stocks.
Why buy a home?
The primary reason for purchasing a home was the desire to own. Period.
Of note in this report, 13 percent of home buyers purchased a multi generational home to take care of aging parents, for cost savings, and because children over the age of 18 are moving back home.
According to NAR, “For first-time home buyers, 64 percent purchased for the desire to own a home of their own (jumping up from 53% last year), compared to just 13 percent for repeat buyers.”
“Repeat home buyers bought for the following reasons: desire for a larger home (13 percent), job-related relocation (11 percent), desire for a smaller home (nine percent), and the desire to be closer to friends and family (nine percent).”