2016 NAR Report Reveals the Allure of Homeownership Rising Among the Younger Generation
The annual National Association of Realtors’ Profile of Home Buyers and Sellers’ is an in-depth survey that provides an understanding from the consumer’s perspective of the trends that are shaping the housing industry. The 2016 edition reveals data evaluating the demographics, housing preferences, motivations and experiences of recent home buyers and sellers. The profile, now in its 35th year, also aims to provide real estate professionals with valuable insight into the needs and expectations of their clients.
So, what is the profile of a typical home buyer and seller in today’s market? How are buyers financing their home? And what tools are buyers using to refine their home search?
Today’s Home Buyers
- First-time buyers made up 35 percent of all home buyers in 2016 – an increase over last year’s near all-time low of 32 percent.
- The typical buyer was 44 years old for the third straight year in a row.
- The median household income for 2015 rose again this year to $88,500.
- Sixty-six percent of recent buyers were married couples, 17 percent were single females, seven percent were single males and eight percent were unmarried couples.
- Eleven percent of home buyers purchased a multigenerational home to provide in home care for aging parents, for cost savings, and to provide room for children over the age of 18 moving back home.
Today’s Home Sellers
- The typical home seller was 54 years old with a median household income of $100,700.
- For all sellers, the most commonly cited reason for selling their home was that it was too small (18 percent), followed by the desire to move closer to friends and family (15 percent), and a job relocation (14 percent).
- Sellers typically lived in their home 10 years before selling, an increase from nine years in last year’s report.
Financing the Home Purchase
- Eighty-eight percent of recent buyers financed their home purchase. Those who financed their home purchase typically financed 90 percent.
- First-time buyers who financed their home typically financed 96 percent of their home compared to repeat buyers at 84 percent.
- For 61 percent of buyers, the source of the downpayment came from their savings. Thirty-five percent of buyers cited using the proceeds from the sale of a primary residence, which was the next most commonly reported way of securing a downpayment.
- Forty percent of buyers saved for their downpayment for six months or less.
- The most difficult step in the home buying process was saving for a downpayment, as cited by 13 percent of respondents.
Home Sellers’ Experience with Real Estate Professionals
- Sixty-four percent of sellers found their agent through a referral from a friend, neighbor, or relative or used an agent they had worked with before to buy or sell a home.
- Seventy-two percent of recent sellers contacted only one agent before finding the right agent to work with to sell their home.
- Ninety-two percent of sellers listed their homes on the Multiple Listing Service (MLS), which is the number one source for sellers to list their home.
- Seventy-seven percent of sellers reported they provided the agents’ compensation.
- The typical seller recommended their agent twice since selling their home.
- Thirty-three percent of sellers recommended their agent three or more times since selling their home.
- Eighty-five percent said that they would definitely (70 percent) or probably (15 percent) recommend their agent for future services.
The 2016 edition of NAR’s Profile of Home Buyers and Sellers continues the longest-running series of national housing data evaluating the demographics, preferences, motivations, plans and experiences of recent home buyers and sellers; dating back to 1981. Results are representative of owner-occupants and do not include investors or vacation homes.