NAR 2015 Profile of Home Buyers and Sellers
Overview: NAR 2015 Profile of Home Buyers and Sellers
The National Association of Realtors (NAR) has released their 2015 profile of home buyers and sellers. The survey portrays home buyers and sellers demographics, housing characteristics, and the experience of consumers in the housing market. Buyers and sellers also provided valuable information about the role real estate professionals play in home sales transactions.
According to their survey, home sales are stronger now than in recent years, however most of these sales are among 2nd time home buyers, as the percentage of new home buyers is at its lowest point in almost three decades. Below is an overview of the survey’s findings.
Only 32% of home sales were made with first-time buyers, a figure which typically hovers near 40%, which is the lowest it has been since 1987, and the second lowest overall since the survey began in 1981. It should also be noted these figures do not account for vacation properties, or homes purchased by a group of investors; they are homes purchased with the intent of becoming a primary residence. Unfortunately, first-time mortgages are still a challenge to obtain for many first-time buyers, and with rental prices rapidly increasing, prospective buyers are being forced to save for their down payment for extended periods of time. The biggest remaining hurdle is this generation’s heavy debt burden, with 58% of first-time buyers claiming student loan debts forced them to delay their purchase.
Buyer Characteristics
Married couples make up the majority of homebuyers, increasing their share 2% from last year to total 67% of home purchases. Single female purchases have decreased from 16% to 15%, while single males accounted for just 9% of home purchases, consistent with 2014. Single income households generally have a difficult time wielding the same purchasing power as those households with multiple incomes. The percent of multi-generational households remained at 13%. 18% of buyers identified as military veterans, 8% as an unmarried couple and 3% as active-duty service members. Recent buyers also moved further from their previous residence this past year – a median distance of 14 miles, up from 12 miles in 2014.
Financing the Purchase
86% of buyers also the majority of the market, financed the purchase of their house in 2015. 91% of buyers chose a fixed-rate mortgage, with 23% choosing a low down payment Federal Housing Administration mortgage, a decline from 43% five years ago; 11 percent of financed homes used the Veterans Affairs (VA) loan program, a program not requiring a down payment. 81% of first-time buyers used their savings for at least part of their down payment. 27% utilized financial assistance from friends or relatives, 8% sold stocks/bonds and 8% tapped into a 401k fund. 53% of repeat buyers reported the proceeds from selling their previous residence made up the majority of their down payment
Searching For a House
42% of prospective buyers use the Internet as their initial home finder tool. 88% utilize a real estate agent in their purchase. The use of tablet or mobile applications in the search has risen from 45% to 61% over the past two years, however studies indicate the old standards of open houses and yard signs are still effective search tactics. Single-family homes remain the most popular purchase option, totaling 83% of the sales made, while townhouses totaled 7% of the market. 52% of buyers in this year’s survey purchased a home in a suburb, 2% more than last year. 20% of buyers bought homes in a small town, 14% bought in an urban area, 13% in a rural area and 2% in a resort/recreation area. The largest factors considered in purchasing a house remain similar to years prior: quality of neighborhood (59%), convenience to jobs (44%), and affordability (38%).
Seller Characteristics
89% of sellers used an agent to sell their home in 2015, with only 8% not utilizing an agent, the lowest figure recorded by this survey since its inception. The average age of a seller was 54, and 77% of sellers were married. Sellers lived in their homes on average 9 years, before selling. Sellers saw a median equity gain of $40,000, a 23% increase over the original purchase price. 66% of sellers found their real estate agent through friends or family, or utilized an agent they had previously sold with. Repeat business or referrals are the main source of business for agents, and 84% of sellers said they would ‘definitely’ (67%) or ‘probably’ (17%) recommend their agent.
Overall, demographics continue to shift as the share of first-time home buyers decreased from last year’s report. As the share of repeat buyers continues to rise, the number of married couple’s also increases and the median income of current home buyers increased as well. Married couples have double the buying power of single home buyers in the market and may be better able to meet the price increases of the housing market.
Lastly, keep in mind the Southwest Florida market may differ from the rest of the nation simply because we are a destination location, and we are also a market consisting of second homes as well as vacation homes. These attributes will skew our demographics from the rest of the nation, however this report provides a general view of the nation’s home buyers and sellers.
D. Michael Burke
Keller Williams Elite Realty
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