Last week, we covered the release of NAR’s 2016 Profile of Home Buyers and Sellers, which reported that first-time homebuyer market share remains at its lowest level since 1989. But NAR’s profile included many more insights on first-time buyers in today’s housing market.
We have spotlighted the most notable below:
1. Northeast Haven – The Northeast region of the U.S. has some of the country’s highest housing costs, but interestingly, it is also where first-time homebuyers are the most common. According to NAR, first timers comprised 44 percent of all home purchases in the Northeast, which was 9 percentage points above the national average and noticeably higher than the other regions (38 percent in the Midwest, 32 percent in the West, and 31 percent in the South). Although NAR did not provide any explanation for the Northeast’s prominence among first-time buyers, the region’s high share of affluent areas – New York and Boston, for instance – may play a role.
2. Single Women Reign – Across the housing spectrum, single women buy homes at a far higher rate than single men, and that holds true for first-time buyers. Eighteen percent of first-time home purchases went to single women, which is more than double the 8 percent for single men.
3. Of Economic Means – The median age of today’s first-time buyer may be relatively low at 32 (by contrast, the median age for repeat buyers is 52), but the typical first timer is still more economically secure than most Americans. In addition to a high median income of $72,000, only a third of first-time buyers earn $54,999 or less; furthermore, 38 percent earn at least $85,000 a year, and 29 percent earn more than $100,000.
NAR’s income numbers also included a small (but sad) reminder of the stubborn income gap among men and women – although single women buy many more homes than single men, their median income is nearly $10,000 lower at $48,400.
4. A More Diverse Bunch – Diversity (for numerous reasons) has long been a problem among homebuyers, but the most recent demographic information on first-time homebuyers suggests that things may be improving. As our chart below shows, first timers are considerably more diverse than repeat buyers:
|Race/Ethnicity||First-Time Buyers||Repeat Buyers|
5. The Desire to Own – There are many reasons to buy a home, but for first-time buyers, the reasoning was simple. According to NAR, a whopping 67 percent of first-time buyers purchased their residence simply because they wanted to own their own space; and it was by a wide margin the most prominent reason for the purchase. Trailing far behind were a changing family situation (6 percent), establishing a household (6 percent), desire for a larger space (3 percent), a job relocation (3 percent), and the affordability of homes (3 percent).