Did you know that first-time buyers made up 26% of homebuyers this year?
Real estate professionals today rely on data to understand client needs and expectations. The more insightful data available, the more agents can cater to their clients, find new ones and educate buyers and sellers in the area.
The NAR 2022 Profile of Home Buyers and Sellers provides some of the most up-to-date data on the behaviors of potential real estate customers. Below are some of the report’s most beneficial highlights for agents looking to build business.
Who is buying?
The number of first-time buyers decreased from 34% in 2021 to 26% this year. The typical first-time buyer was 36 years old this year which is up from 33 years old last year. Of these buyers, 18% were unmarried couples and 5% were other kinds of household compositions. These are record highs for both groups.
Although there’s been a dip in first-time homebuyers, this is still an important market to tap into. First-time buyers rely on the guiding presence of a real estate professional regardless of age. As this group diversifies, staying current on buyer behavior data will be key.
To get even more granular on first-time homebuyers, 88% of buyers were White/Caucasian, 8% were Hispanic/Latino, 3% were Black/African-American, 2% were Asian/Pacific Islander and 3% identified as other. While we saw numbers for most racial and ethnic groups decline, White/Caucasian buyers as well as Hispanic/Latino buyers grew in 2022.
These numbers can help estate professionals understand the demographics of their region in order to better serve the community. Holding homebuyer seminars for local renters can provide information for potential buyers and educate them on beginning the process, finding an agent and understanding the market.
Where are people buying?
With remote jobs on the rise, buyers also seem to be venturing further outside of their communities. The median distance between a recent buyer’s old home and the home they moved into was 50 miles. Between 2018 and 2021, the median was only 15 miles.
The largest percentages of homes purchased were located in suburbs and small towns. 39% of all buyers purchased in a suburb or subdivision, 29% in a small town and 19% bought in a rural area.
This signifies a major increase in the distance average buyers are willing to move. It also sheds light on migration trends for the real estate industry, helping agents better serve their customers.
How long are buyers looking?
Buyers typically searched for 10 weeks, looked at a median of five homes, and viewed four homes only online. The number of weeks searching for a home grew from eight weeks seen in the 2020 and 2021 reports.
Who is financing?
When it comes to mortgages, 78% percent of recent buyers financed their homes this year, down from 87% in the 2021 report. The reason behind this drop is an increased share of repeat, all-cash buyers. First-time buyers still tend to finance and will likely need the guidance of professional throughout the process.
Who is selling?
This year, the average age of home sellers increased. The typical seller was 60 years old, compared to 56 last year. Sellers tended to live in their homes for 10 years before selling. This is an increase from eight years in 2021’s report.
Married couples selling their home accounted for 67% in 2022, down slightly from 69% last year. Single females who sold their homes decreased slightly this year to 16%. Among all home sellers, 77% did not have children under the age of 18 residing in the home, 95% identified as White or Caucasian and 99% of households speak English as their primary language.
How are people selling?
A slight decrease from 90% in 2021, 86% of home sellers worked with a real estate agent to sell their homes this year. FSBO sales remain below the historic norm at 10% this year. From 2001 to 2008, FSBO sales ranged from 12-14%. Only 1% of recent sellers used an iBuyer program to sell their homes.
If the buyer and seller know each other, the sale can be either an arms-length transaction consistent with local market conditions or it may involve considerations that would not be relevant in the absence of a prior relationship. Of all home sellers, only 10% reported knowing the buyer of their home. Among those sellers that knew the buyer, 53% sold their homes themselves.
