Trends in Buying and Selling Houses
Consumers trends have changed over the past 35 years– but by how much? Thirty-five years ago, the National Association of Realtors® introduced the first Profile of Home Buyers and Sellers. It was 1981 and mortgage rates were over four times higher than they are today, and first-time buyers made up a much larger share of overall sales. While many home buyer and seller behaviors and preferences have changed, some have remained constant over the last 35 years.
35 years ago, consumers and Realtors® navigated a much different real estate landscape. The internet hadn’t been invented and the average monthly mortgage rate was 15.12 percent. One important constant during this time has been Realtors®’ role as the leading advocate for home ownership and a trusted expert in helping buyers and sellers close the deal.
The quickening pace of home sales over the past year included a small rebound from two key segments of buyers who have been missing in action in recent years.
- First-time buyers
- Single women
After slipping for 3 straight years, the share of sales to first-time home buyers in the 2016 survey ticked up to 35 percent, which is the highest since 2013 – when it was 38 percent – the near 30-year low of 32 percent was in 2015.
Married couples still make up the largest share of buyers (66%) and had the highest income of $99,200. The survey also revealed that single women made up more of the buyer share than in recent years. After falling to 15 percent of buyers a year ago, which tied the lowest share since 2002, single females represented 17 percent of total purchases, the highest since 2011 at 18%. This is compared to 35 years ago when single females represented 11% of purchases.
Despite the internet’s growing popularity over the past 20 years, buyers and sellers continue to seek a real estate agent to buy or sell a home. That trend hasn’t changed– (we’re excited about THAT!) In NAR’s 2016 survey, nearly 90 percent of respondents worked with a real estate agent to buy or sell a home. For-sale-by-owner transactions are down to 8 percent, their lowest ever for the second year in a row.
Since NAR’s inaugural survey, consumer trends and preferences have evolved and housing costs have gotten more expensive. In 1981, the typical buyer purchased a 1,700-square-foot home costing $70,000 ($201,376 in inflation-adjusted dollars). In the 2016 survey, purchased homes were typically 1,650 square feet and cost $182,500.
What’s your down payment?
In 1989 NAR started collecting buyer data on down payments, first-time home buyers financed their purchase with a 10% down payment and repeat buyers financed a loan with a 23% down payment. The typical amount of money put down fell to as low as 2% for first-time buyers both in 2005 and 2006. For repeat buyers, the smallest median down payment was 13% in 2012 and 2014, which is likely due to reduced equity in the home that was sold.
In recent years, down payment amounts have remained mostly unchanged, coming in at 6 percent for first-time buyers the last two surveys and either 13 percent or 14 percent for repeat buyers in the past four surveys.
Contact CM Fox Real Estate at 518-861-7030 or visit our website at www.cmfox.com to connect with an agent and learn more about buying or selling a home TODAY!