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- The age of the typical first-time home buyer increased to 36, according to NAR’s 2022 Profile of Home Buyers and Sellers.
- The share of first-time home buyers dropped to a record low of 26%.
- The median distance home buyers have moved from their previous homes is a record high of 50 miles.
Buying a home in 2022 has been challenging for most. Intense competition at the beginning of the year has transitioned into affordability issues that come with higher mortgage rates.
NAR’s 2022 Profile of Home Buyers and Sellers is the latest edition of their annual report that, since 1981, has provided a detailed analysis of the demographics, preferences, and experiences of homebuyers and sellers across the U.S.
According to this report, housing affordability and low inventory significantly impact where, when, and how consumers in the U.S. are purchasing homes.
Record Highs—and Lows
Compared to the previous year, the share of first-time buyers has dropped to a record low. And the age of the typical first-time homebuyer has reached a new peak at 36.
Another significant difference is the median distance homebuyers have moved from their previous homes. That distance has more than tripled from the previous four years, while shares of homes purchased in small towns and rural areas have jumped to record highs.
It’s not surprising that the share of first-time buyers shrank to the lowest level ever recorded given the housing market’s combination of historically low inventory, persistently high home prices and rapidly escalating interest rates. Those who have housing equity hold the cards and they’ve fared very well in the current real estate market. First-time buyers are older as a result of saving for down payments for longer periods of time or relying on a generational transfer of wealth to propel them into homeownership.
Characteristics of Home Buyers
NAR’s report provided a snapshot of the typical home buyer in today’s housing market.
- First-time homebuyers represent 26% of homebuyers—down from 34% in 2021. That share is the lowest since NAR started collecting data for its annual report.
- The age of the typical first-time buyer was 36—up from 33 in 2021—while the age of the typical repeat buyer rose to 59 years. Both are record highs.
- Demographics — The largest share of homebuyers, 61%, were married couples; 17% were single females and 9% were single males. This year, 10% were unmarried couples, the highest share of unmarried couples ever recorded.
- Multi-generational homes — 14% purchased a multigenerational home—to take care of parents or to provide a home for adult children or relatives who can’t afford a place of their own.
- Racial & Ethnic Composition of homebuyers — 88% were White/Caucasian, 8% were Hispanic/Latino, 3% were Black/African-American, 2% were Asian/Pacific Islander, and 3% preferred not to answer.
- Sexual Orientation — 91% identified as straight/heterosexual, 2% as gay or lesbian, 2% as bisexual, and 5% preferred not to answer.
- Veteran Status — 22% of recent homebuyers were veterans; 1% were active-duty service members.
- Primary reason for buying a home — 22% wanted to own a home of their own. That share jumps to 62% for first-time homebuyers.
Characteristics of the Homes Purchased
NAR also recorded some notable differences in the homes purchased this year compared to last.
- 12% of homebuyers bought a new home; 88% bought a previously-owned home.
- 41% of homebuyers who recently bought a new home did so to avoid the cost of renovations and older-home issues with plumbing or electrical.
- 31% of homebuyers who bought previously owned homes did so because of the lower price (compared to new homes).
- Most common home type — 79% bought a detached single-family home; 8% bought a mobile or manufactured home.
- Median distance between the home purchased and the original home: 50 miles—a significant increase from the median distance between 2018 and 2021 (15 miles).
- Nearly half (49%) of buyers cited the quality of the neighborhood as the #1 factor in choosing a location.
- Over a third (37%) of buyers cited convenience to friends and family OR overall affordability.
- Buyers typically paid 100% of the asking price for a home; 28% purchased a home for more than the asking price.
- The typical home purchased had 1,800 square feet, with three bedrooms and two bathrooms, and was built in 1986.
- The typical homebuyer expected to keep and live in their homes for a median of 15 years; 28% said they had zero intention of ever moving.
What does this mean for real estate agents?
If you don’t know the typical age or motivations of the homebuyers in your area, you won’t know how to get their attention.
The success of your marketing strategy depends on how well you know the potential buyers in your market.
Internalizing the data in NAR’s report and building on it could be the difference between building a six- or seven-figure business and deciding real estate is just not for you.
Get familiar with these numbers. And don’t be afraid to try a completely different approach with your marketing, especially if what you’re doing right now is getting you nowhere.
Get to know the buyers in your market, so you can identify exactly what would make the home-buying process easier for them. NAR’s data is a step in that direction. The rest you can learn by having conversations with real people in your neighborhood.