Photo: Robert Clark
There were fewer first-time US homebuyers shopping for homes in 2016 than the previous year.
Homebuyers were predominantly married couples interested in pre-existing homes, according to a report recently released by the National Association of Realtors (NAR).
The share of first-time buyers fell to 34 percent in 2016, down 1 percentage point from the previous year. This remains below the historic norm of 40 percent, says the NAR in the report.
Homebuyers in 2016 were 45 years old on average and earned a median annual household income of $89,000, which was up from 2015. The yearly increase in buyers’ median salary was likely a side-effect of the national inventory crisis.
“The nationwide increase in home prices was caused by a lack of housing inventory, pushing out lower income buyers,” says NAR.
Some 65 percent of homebuyers were married couples, compared to 8 percent being unmarried couples. Meantime, only 7 percent of recent homebuyers were single men, and 18 percent were single women.
Couples, married or otherwise, have an edge in the market over their single counterparts.
“Married and unmarried couples have double the buying power of single homebuyers in the market and may be better able to meet the price increases of this housing market,” says NAR.
Buyers of previously-existing homes made up 85 percent of all homebuyers, and 32 percent said they purchased a previously owned home to get a better price compared to new construction.
Unsurprisingly most buyers interested in new construction were trying to avoid renovations and electrical or plumbing issues.
Detached single-family homes proved to be the most popular choice of housing type of all recent buyers at 83 percent, while 7 percent opted for townhomes or row houses. Multigenerational housing was a necessity for 13 percent of all recent buyers, either to care for aging relatives or because children over 18 years of age had moved back home.
The number of weeks buyers searched for a home remained steady from the previous year at 10 weeks, but buyers in many areas were severely depleted inventory were forced to buy more expensive homes.
Rising home prices are also impacting sellers, who are staying in their homes on average 10 years — longer than the historic tenure of six to seven years.
The average seller was 55 years old, with a median annual household income of $103,000. Most sellers wanted more space or to be closer to family and friends.
Sellers received a median 99 percent of their original asking price in 2016, and homes were on the market a median of three weeks, down one week from 2015. Over a third of all recent sellers offered buyers incentives to sell their home.
The majority of sellers use an agent to sell their home. Only 8 percent choose to sell on their own, the lowest share on record for the third year in a row since 1981, when the report originated.
Click here to read the entire report.