Culture

Older home buyers, more cash, and (relatively) fewer first-timers: A national survey sheds light on the state of the housing market


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 …read more

Source:: The Mercury News – Entertainment

      

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