For most home buyers, the purchase of real estate is one of the largest financial transactions they will make.
Buyers purchase a home not only for the desire to own a home of their own, but also because of changes in jobs, family situations, and the need for a smaller or larger living area. This annual survey conducted by the NATIONAL ASSOCIATION OF REALTORS® of recent home buyers.
Characteristics of Home Buyers
First-time buyers made up 31% of all home buyers, a dip from last year’s 33%.
The typical buyer was 47 years old this year, and the median household income for 2019 rose again this year to $96,500.
12% of home buyers purchased a multi-generational home, to take care of aging parents, because of children over the age of 18 moving back home, and for cost-saving.
18% of recent home buyers were veterans and 2% were active-duty service members.
Characteristics of Homes Purchased
Most recent buyers who purchased new homes were looking to avoid renovations and problems with plumbing or electricity at 44%. Buyers who purchased previously-owned homes were most often considering a better overall value at 35%.
Home prices increased slightly this year to a median of $272,500 among all buyers. Buyers typically purchased their homes for 99% of the asking price.
The typical home that was recently purchased was 1,900 square feet, had three bedrooms and two bathrooms, and was built in 1993.
Heating and cooling costs were the most important environmental features for recent home buyers, with 83% finding these features at least somewhat important.
The Home Search Process
For 43% of recent buyers, the first step that they took in the home buying process was to look online at properties for sale, while 18% of buyers first contacted a real estate agent.
Buyers typically searched for eight weeks and looked at a median of 9 homes and viewed 5 of these homes only online.
The share of home buyers who used the internet to search for a home increased to an all-time high of 97%.
64% of recent buyers were very satisfied with their recent home buying process.
Home Buying and Real Estate Professionals
88% of buyers recently purchased their home through a real estate agent or broker, and 6% purchased directly from a builder or builder’s agent.
Having an agent to help them find the right home was what buyers wanted most when choosing an agent at 51%.
73% of buyers interviewed only one real estate agent during their home search.
91% of buyers would use their agent again or recommend their agent to others.
Financing the Home Purchase
87% of recent buyers financed their home purchase. Those who financed their home purchase typically financed 88%.
First-time buyers who financed their home typically financed 93% of their home compared to repeat buyers at 84%.
For 58% of buyers, the source of the downpayment came from their savings. 38% percent of buyers cited using the proceeds from the sale of a primary residence, which was the next most commonly reported way of securing a downpayment.
Home Sellers and Their Selling Experience
For all sellers, the most commonly cited reason for selling their home was the desire to move closer to friends and family (15%), that it was too small (14%), and a change in family situation (12%).
89% of home sellers worked with a real estate agent to sell their home.
For recently sold homes, the final sales price was a median of 99% of the final listing price.
46% of all sellers offered incentives to attract buyers.
Home Selling and Real Estate Professionals
77% of recent sellers contacted only one agent before finding the right agent they worked with to sell their home.
91% of sellers listed their homes on the Multiple Listing Service (MLS), which is the number one source for sellers to list their home.
77% of sellers reported that they provided the agent’s compensation.
For-Sale-by-Owner (FSBO) Sellers
The median age for FSBO sellers is 57 years. 64% of FSBO sales were by married couples that have a median household income of $96,700.
FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $217,900 last year (up from last year), and significantly lower than the median of agent-assisted homes at $242,300.
FSBO homes sold more quickly on the market than agent-assisted homes. 77% of FSBO homes sold in less than two weeks—often because homes were sold to someone the seller knows.
Home Buyers Before and During COVID-19
Buyers who purchased after March were more likely to purchase a multi-generational home at 15% compared to 11% who purchased before April.
Buyers who purchased after March have a shorter expected tenure in the home they purchased, just 10 years compared to those who purchased before the pandemic who expect to own their home for 15 years.
57% of buyers who purchased during the pandemic purchased in a suburban location, compared with 50% of pre-pandemic buyers.
Buyers who purchased during the pandemic purchased a home that typically was $339,400 compared to pre-pandemic buyers who purchased a home that was $270,000. 23% of buyers who purchased after March purchased a home that was $500,000 or more.
Home Sellers Before and During COVID-19
The top reason for sellers before April to sell their home was because they wanted to be closer to friends and family. Home sellers who sold their home after March were more likely to report the main reason for selling was because their home was too small.
Home sellers who sold after March were more likely to say they were somewhat urgent in their need to sell their home – 46% compared to 39% of those who sold before April.
Sellers who sold after March were more likely to use technology as a marketing tool. The biggest difference seen is among those using virtual tours. 27% used virtual tours after March compared to 16% of those pre-April.
Home sellers who sold after March sold their home for $300,000 while those who sold before April sold it for $270,000.
If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
