NEW YORK – Real estate and home buying trends go far beyond mortgage rates and home prices. Better Homes and Gardens Real Estate has identified several more trends that provide insight into today’s homebuyers and what they seek in a home.
Who are the buyers?
There is a big difference between a first-time buyer and someone who already owns a home. The 2023 Profile of Home Buyers & Sellers by the National Association of Realtors® (NAR) reports a 23-year age gap between a typical first-time buyer (35 years old) and a repeat buyer (58 years old).
There are also more unmarried people buying homes today. While 59% of all buyers were married couples, single females purchased 19% of homes, followed by single men (10%) and unmarried couples (9%). Notably, 70% of recent home buyers did not have a child under 18 living in the home, a drastic increase from 42% back in 1985.
“First-time buyers remain active and continue to account for about 30% of all home purchases,” said Ginger Wilcox, president of Better Homes and Gardens Real Estate. “While saving for a down payment remains a challenge, the overwhelming majority of first-time homebuyers are not putting down 20% and many are getting financial help from parents, families and friends. The repeat buyer has a significant advantage as they can utilize equity from their previous home to either pay cash or reduce their mortgage as they move up or down in home size.”
Staying close … again
“The pandemic-fueled, work-from-anywhere trend that allowed so many to purchase a home in more affordable areas seems to be subsiding,” Wilcox said. “Better Homes and Gardens Real Estate affiliated agents are reporting more and more buyers who left a market are starting to return due to work or because they miss family and friends.”
This trend is shown in NAR data, according to Wilcox.
“For years before the pandemic, it was normal for repeat buyers to move within 15 miles of their previous home,” she said. “It jumped to 50 miles a year ago as so many opted to move to more affordable locations and take advantage of the remote work boom. We are back to a 20-mile radius today.”
What do buyers want?
NAR reported that 39% of repeat buyers traded up, while 33% purchased a smaller home. But home size is not the only consideration, according to Wilcox.
“It was interesting to see that 60% of all buyers said the quality of the neighborhood was the most important factor in determining where to live,” she said. “We are returning to a real estate market where life events trigger buying decisions. Being close to family and friends is the biggest driver of where people want to be, even more than affordability.
“We are also seeing a trend in longevity in a home. While most live in their home for 10 years, today’s buyer believes they will stay in their recently purchased home for at least 15 years. Therefore, it is important for potential buyers to look as far into the future as possible when choosing their next home and thinking about job locations, marriage, children, and other factors.”
What about older Americans?
Better Homes and Gardens Real Estate is tracking baby boomers’ home buying and selling patterns. This generation, now 59-77, has redefined societal norms since they were born and is doing the same in housing as they age. The U.S. Census reports the homeownership rate is more than 75% for baby boomers, and AARP reports that an overwhelming majority of this group wants to age in place.
“One of the big questions hanging over the housing market is how long baby boomers will stay in their existing homes,” Wilcox said. “As those in this demographic move on to the next phase in their lives, they will be looking for more manageable homes, nearby medical facilities, accessible community amenities and proximity to friends and loved ones. A good real estate professional will be able to assist and understand how to maximize the equity they have built.”
NAR shared that those over 60 almost tripled the number of home purchases in senior-related housing compared to the previous year (19% vs. 7%, respectively). Retirement, the health of a loved one, and the desire to downsize are the driving factors for a move for those 65 and older. Only 3% in this age group say they want a larger home.
The process
The fast-paced housing market continues. Buyers should select an agent with whom they are comfortable, who has a like-minded communication style, and who has experience working in the price points and communities they are interested in. Choosing an agent who can help identify reputable loan officers with various financing options is also essential.
“More than half of all buyers use an agent who was referred to them or someone they worked with previously,” Wilcox said. “I always encourage buyers to ask around and interview more than one agent. Don’t be afraid to spend time with your potential agent to ensure they are right for you.”
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