There are housing reports, and then there is NAR’s Profile of Home Buyers and Sellers.
An authoritative look at the housing market and the consumers who propel it forward, NAR’s report is a must-see document every fall, as it reveals new and exciting dimensions to the nation’s market that anticipate where it is heading in the coming year.
We will be covering the report in stages, so to begin, we are looking at the report’s five most notable findings on the 2016 homebuyer:
1. All the Single Ladies – Married couples were, unexpectedly, the largest share of homebuyers, but the market share for single females rose from 15 percent last year to 17 percent this year. Even more, the share for single males declined from 9 percent to 7 percent, meaning that this year, bachelorettes have purchased homes at more than twice the rate of bachelors.
Single-female buyers remain below their boom-era peak – during the bubble years, they averaged more than 20 percent of all buyers – but 2016’s gain suggests they are rising in prominence.
2. The Varied Reasons for Multi-Gen Homes – Multigenerational households remained a respectable chunk of homebuyers in 2016 (11 percent total), but the reasons for pursuing such households varied wildly. For instance, according to NAR, 19 percent of multi-gen homebuyers purchased their property to care for aging parents, with that share being highly represented among single female (21 percent) and unmarried couple (24 percent) buyers. At the same time, 18 percent did so for cost savings, and 14 percent anticipated older children and relatives moving back in.
3. (Un)Diversity amongst Homebuyers – Decades of redlining and housing segregation have rendered homebuying a largely white enterprise, and NAR’s report reaffirms how that unfortunate legacy continues into 2017. A full 85 percent of homebuyers this year were white, followed by 7 percent Hispanic/Latino, 5 percent Asian/Pacific Islander and only 4 percent Black. Below, our chart shows how demographics differ across the nation’s regions:
4. The Absence of First-Time Buyers – In its press for the 2016 Profile, NAR has been promoting 2016 as the return of the first-time buyer, and indeed, their market share did rise from 32 percent last year to 35 percent this year. However, there are two reasons to be wary of any pronouncements: first, even at 35 percent, the first-time buyer share is still the lowest it’s been since 1989, when it was 38 percent (and it remains below the historic average of 40-41 percent); and second, all the economic stagnation that has prohibited consumers from buying their first homes has barely budged, and as long as the economy remains suck in the mud, the homebuying pool will not expand – especially as homes become more expensive.
We should mention, though, that there is some disagreement amongst real estate observers on how many first-time homebuyers are out there; a recent Zillow survey argued there are far more first-time homebuyers in today’s market than NAR gives credit.
5. The Desire to Own – Among all the various reasons to buy a house, the simple desire to own a home of one’s own won out, with 31 percent of all buyers (and 67 percent of first-time buyers) citing that reason. Following far behind were the desire for a larger home (10 percent), a job-related relocation (8 percent), a changing family situation (8 percent), the desire to be closer to family/friends (7 percent) and the desire to live in a better area (6 percent).