According to a new survey from the National Association of Realtors (NAR), veterans and active military purchase at younger ages and buy larger, more expensive homes due not only to differences in household demographics, but the affordable financing options made available to servicemembers.
This is the Association’s first ever survey of this demographic, and the 2016 Veterans & Active Military Home Buyers and Sellers Profile offers some pretty interesting gems. Of all home buyers, 18 percent identified as veterans, and 3.0 percent as active military. Of all home sellers, 21 percent identified as veterans, 1.0 percent as active military.
But what caught our attention is that nearly all active-service military members use an agent.
The median age of an active service home buyer is 34 years old, compared to non-military buyers at 40 years old, they’re more likely to be married and have multiple children, and therefore typically purchase bigger (and more expensive) homes.
One advantage of military life
Dr. Lawrence Yun, NAR chief economist, says young active-service buyers (ages 18-35) bought homes at a far greater rate (51 percent) than non-military buyers (34 percent).
“Despite having a lower median income ($76,800), more stable job security and no down payment financing options give aspiring homeowners in the military a deserving advantage over their civilian peers,” he said. “Furthermore, their tendencies to marry and raise a family at an earlier age and carry less student debt make buying a home a more desirable and achievable option.”
The most popular loan type for military members is Veteran Affairs (VA) loans, offering 100 percent financing and an average of 5.0 percent down (compared to the 11 percent average for non-military buyers).
Adds Dr. Yun, “Current data shows that VA loans perform remarkably well and are a safe and affordable choice. Their current seriously delinquent and homes in foreclosure rate is 2.78 percent versus 3.44 percent for non-VA loans.”
What and why they buy or sell
Despite a lower median income ($86,500), active military home buyers typically bought a 2,170 sf home for $226,00 while veterans (median income of $84,00) typically bought a 1,980 sf home for $220,00.
Active service members, not surprisingly, indicated that job relocation was their primary reason for home purchase, followed closely by the desire to be homeowners.
Veterans tend to buy to be closer to friends and family, or for retirement.
It’s no surprise that while non-military buyers have averaged a move of only 10 miles for years, active and veteran service members average 75 and 28 miles, respectively.
Veterans were most influenced to select a neighborhood based on the quality of that neighborhood, while active military indicate convenience to their job is the top priority.
The most common reason veterans sold their home was to be closer to friends and family, while job relocation was the top reason for active service members to sell.