By MICHAELLE BOND, The Philadelphia Inquirer (TNS)
Rising home prices are continuing both to benefit established homeowners and to challenge buyers trying to purchase their first home, according to the National Association of Realtors’ annual report surveying buyers and sellers.
“The U.S. housing market is split into two groups: first-time buyers struggling to enter the market and current homeowners buying with cash,” Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors, said in a statement.
Recently, the share of first-time buyers shrank to a historic low, according to the report that the association published Monday. Meanwhile, a record share of buyers are paying cash.
The National Association of Realtors has been publishing its report since 1981. Its latest survey of buyers and sellers covers transactions that happened between July 2023 and June 2024.
Below are a few takeaways from this year’s report.
Fewer and older first-time homebuyers
Just under one in four homebuyers purchased for the first time. That’s the lowest share of first-time buyers since the association began collecting data in 1981. In last year’s report, about a third of buyers had purchased their first home.
These buyers also are older and make more money than in the recent past.
The typical first-time buyer was 38 years old in the latest survey, compared to 35 in last year’s report.
In the last two years, the typical first-time buyer’s income has increased by $26,000. According to this year’s survey, first-time buyers had a median household income of $97,000 per year.
Buyers are having to wait to purchase their first homes and needing higher incomes because properties have gotten less affordable.
“First-time buyers face high home prices, high mortgage interest rates, and limited inventory, making them a decade older with significantly higher incomes than previous generations of buyers,” Lautz said.
A record share of homebuyers paid cash
A record high of 26% of buyers paid with cash.
Thanks to rising home values, Lautz said current homeowners are using built-up home equity to make cash purchases or “large down payments on dream homes.”
The typical down payment was 9% for first-time buyers — the highest percentage since 1997. It was 23% for repeat buyers — the highest since 2003.
Savings are what most first-time buyers — about seven in 10 in the survey — rely on to purchase a home. One in four used loans or gifts from family and friends. Slightly fewer — about one in five — used financial assets. An all-time high of 7% used inheritances.
Multigenerational homes are becoming more popular
Homebuyers are looking to save money by living with more people. In the latest survey, the highest share of buyers that the National Association of Realtors has recorded — 17% — purchased a multigenerational home.
“As home buyers encounter an unaffordable housing market, many are choosing to double up as families,” Lautz said. “Cost savings are a major factor, with young adults returning home — or never leaving — due to prohibitive rental and home prices.”
And on the other end of the age spectrum, a quarter of those who purchased a multigenerational home did so to take care of aging parents.
More married couples and single women bought homes
An increasing share — roughly three in five homebuyers — were married. The share of unmarried couples buying homes dropped to 6%.
The share of single women buying homes grew slightly to 20%, while the share of single men buying homes dropped to 8%.
The share of single women buying their first home grew by 5%.
Almost three in four homebuyers did not have a child under 18 in the home. That’s the highest share the National Association of Realtors has recorded.
Home sellers are getting older
The typical home seller was 63 years old — the oldest the survey has ever recorded.
The most popular reason for selling was a desire to move closer to family and friends. Roughly equal shares of sellers said their current home was too small or too large. One in 10 said they wanted to sell because their neighborhood was becoming less desirable.
Sellers’ homes stayed on the market longer this year. They spent a median of three weeks for sale before finding a buyer — one week longer than last year.
©2024 The Philadelphia Inquirer, LLC. Visit at inquirer.com. Distributed by Tribune Content Agency, LLC.
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