Highlights from the 2010 NAR Profile of Home Buyers and Sellers
The National Association of REALTORS® surveys home buyers and sellers annually to gather detailed information about the home buying and selling process. These surveys provide information on buyer and seller demographics, housing characteristics and the experience of consumers in the housing market. Buyers and sellers also share information on the role that real estate professionals play in home sales transactions. NAR’s Profile of Home Buyers and Sellers reports – based on results of those surveys – provide real estate professionals with insights into the needs and expectations of their clients. This year’s data provide valuable insight into how buyer and seller demographics have changed based on shifting market conditions. The latest 2010 NAR Profile of Home Buyers and Sellers* was released during NAR’s annual conference and expo in November. Below we highlight some of the findings of that survey report that focus on home buyers.
Homebuyer Demographics: Who’s Buying
In 2010, home buyers saw the continuation and expansion of the home buyer tax credit. While the original home buyer tax credit only covered first-time buyers, the expansion covered move-up
buyers. The tax credit and record home affordability changed the home-buyer landscape.
One of the most important changes reflected in this year’s findings was the share of first-time buyers. Over the last 10 years, first-time purchasers have accounted for 40-41 percent – on average – of all home buyers during the course of a year. The 2010 survey results show that 50 percent of all purchasers between July of 2009 and June of 2010 were first-time buyers. This is the largest share of first-time buyers in more than 19 years.
Improved affordability has opened the home-buying market to those who would not have been able to purchase a home in the past. Median household income of home buyers declined nationally and in all regions for the last two years. But at the same time, mortgage interest rates declined to historic lows and home prices remained affordable. Consequently, the decline in the median household income of home buyers reflects how improved housing affordability – coupled with government programs supporting home buying – opened the market to home buyers who would not otherwise have been financially able to purchase a home.
Improved affordability and the increased share of first-time home buyers are also reflected in the increased share of single buyers. Single buyers in 2001 accounted for 22 percent of the home-buying market; that share grew to 32 percent in 2010. The role of single female buyers has also been expanding in recent years, and held stable at 20 percent in 2010. This year the share of single male home buyers climbed to an all-time high of 12 percent of the market. The share of married couples declined to 58 percent in 2010 from 68 percent in 2001.
Why They Buy
Among buyers of nearly every age bracket and every household composition – those with children and those without children – the primary reason for purchasing a home was the desire to own a home. This result has been consistent over the years. Nearly 31 percent of all buyers cited this reason in 2010. This was especially true for first-time buyers—53 percent reported the most important reason for purchasing a home was the desire to own a home.
For repeat buyers the most important reason for their recent home purchase was the desire for a larger home and a job-related relocation or move. Affordability as a motivator has increased among first-time and repeat buyers and for buyers who are under 44 years of age.
The Home Purchased
What a buyer purchased depended greatly on the quality of the neighborhood, convenience to job, overall affordability of homes, convenience to friends and family, and the quality of the school
district. Whether a buyer was a first-time or repeat buyer, approximately three quarters of all home buyers purchased a detached single-family home.
Continuing a trend since 2007, the share of home buyers purchasing a previously owned home has increased, while the share purchasing a new home has declined. The typical home purchased was 1,780 square feet, had three bedrooms and two bathrooms, was built in 1990, and was 12 miles from the buyer’s previous residence. Once buyers find the home they are looking for they plan to stay in their home for 10 years.
The Home Search
The Internet is playing an ever increasing role in the home search process. Thirty-six percent of buyers looked online for properties for sale as their first step in their search for a home to purchase. An additional 11 percent began by finding information online about the home buying process. Nine in ten buyers used the Internet in some way during their search process.
While the usage of the Internet in the search process has grown, it does not diminish the use of real estate professionals; rather, it provides a complementary relationship. In fact, home buyers who used the Internet to search for a home were actually more likely than those who did not use the Internet to buy their home through a real estate agent (85 percent vs. 70 percent). Often those Internet users take steps to look at a particular property they saw online. Eighty-eight percent of recent buyers used an agent during their home search process. The use of other information sources has declined in recent years.
The Role of Real Estate Professionals
Home buyers still rely heavily on the expertise of real estate agents to navigate the housing market and help guide them through the home sales transaction. Eighty-three percent of buyers purchased a home through a real estate agent, up from 77 percent in 2009. Fifty-seven percent of buyers found their agent through a referral or used an agent they had used in the past to buy or sell a home.
Buyers most want their agent to help them find the right home to purchase, but they also want help negotiating the terms of sale and with price negotiations. Sixty-six percent of buyers benefited by having their real estate agent help them understand the process.
Satisfaction with one’s real estate professional is very high, and home buyers report that they were very satisfied with the services they received from their agents. More than 95 percent of buyers said they were very or somewhat satisfied with their agent’s honesty and integrity and their agent’s knowledge of
the home purchase process.
Buying a home is a complex and at times can be a daunting process. There are many options as well as constraints that households face when searching for the right home that will meet their needs today as well as in the future. However, it is important to know that even amidst market uncertainty buyers want to make an investment through home ownership. Buyers are overall satisfied with the home buying process, with nine in ten reporting they were at least somewhat satisfied. Additionally, 87 percent of buyers would use their real estate agent again or recommend their agent to others.