According to the National Association of Realtors® Home Buyers and Sellers Survey, first time home buyers made up 32% of the market, down from the 33% reported last year. This is the second lowest total reported since 1987. The shift in demographics indicates that tightened inventory levels and increased home prices in many areas of the country prevented a lot of first time home buyers from purchasing a new home in 2015.
With first-time home buying on the decline, what was the predominant demographic of home purchasers in the last year? What did they want and what made them tick? If you have your real estate license, or even if you’re simply thinking about it, you need to understand these market profiles in order to best address the needs of your clients.
2015 Home Buyer Profiles
Most are married. 67% of recent buyers were a married couple. Next, single females comprised 15% of recent buyers. Single males accounted for 9%. Finally, unmarried couples made up 7%.
They’re Gen-Xers. The typical buyer in 2015 was 44 years old and had a median household income of $86,100.
They’re tech savvy. 82% found website searches a useful source of information. Buyers typically searched for 10 weeks and looked at a median of 10 homes.
They’re visual. Among buyers who used the internet during their home search, 87% found photos and 84% found detailed information about properties very useful.
They prefer old vs. new. Buyers of previously owned homes made up 84% compared to 16% of buyers who bought brand new homes. The typical recent home purchased was built in 1991.
They like help. 87% of buyers recently purchased their home through a real estate agent or broker. 8% purchased directly from a builder or builder’s agent. 53% of buyers indicated that having an agent to help them find the right home was most important when choosing an agent.
They prefer suburbia. 52% of home buyers purchased a home in a suburb or subdivision. 20% bought in a small town. The remaining gravitated toward urban and rural areas at 14% and 13%, respectively.
They’re likely to use/give a referral. 41% found their agent through a referral from a friend, neighbor, or relative. 88% of buyers would use their agent again or recommend their agent to others.
They’re invested in their future. 80% of reported home buyers viewed their purchase as a good investment.
A View from the Other Side
As a real estate agent, it is important to gain insight about the other side of the equation as well – the home seller. What predominant characteristics did sellers have in the last year and how did their experience differ from the buyer’s?
2015 Sellers Profile
They’re Baby Boomers. The typical home seller in 2015 was 54 years old, with a median household income of $104,100.
Most are married. 77% of home sellers in 2015 were married and were in the home for approximately 9 years before selling.
Their equity increased. Sellers experienced a median equity gain of $40,000 – a 23% increase over the original purchase price.
They prefer to hire agents. 89% of home sellers worked with a real estate agent to sell their home. Only 8% of recent home sales were FSBO, which is the lowest share reported since the survey’s inception in 1981.
They’re likely to give a referral. The typical seller has recommended their agent once since selling their home. 32% have recommended their agent three or more times since selling their home. 84% said they would definitely or probably recommend their agent for future services.
For a complete list of highlights on last year’s buyers and sellers, check out the latest research from NAR’s 2015 Profile of Home Buyers and Sellers.