Buying a primary residence for home buyers is a financial decision but also an emotional decision that involves many
lifestyle factors. For most home buyers, the purchase of am primary residence is one of the largest financial transactions
they will make. Buyers purchase a home not only for the desire to own a home of their own, but also because of
changes in jobs, family situations, and the need for a smaller or larger living area.
In 2017, the share of first-time home buyers was 34 percent, a decrease from 35 percent last year. This figure
gravitates away from the historical norm at 40 percent of the market. The median household income increased again this year,
likely due to a nationwide increase in home prices caused by a lack of housing inventory pushing out lower income buyers.
Married and unmarried couples have double the buying power of single home buyers in the market and may be better
able to meet the price increases of this housing market. Repeat buyers are also returning to the market.
Tightened inventory is affecting the home search process of buyers. Due to suppressed inventory levels in many areas of
the country, buyers are typically purchasing more expensive homes as prices increase. The number of weeks a buyer is
searching for a home remained at 10 weeks. Buyers continue to report the most difficult task for them in the home buying
process is just finding the right home to purchase. Increased prices are also impacting sellers. Tenure in the
home has maintained a peak of 10 years again this year. Historically, tenure in the home has been six to seven years.
Sellers may now have the equity and buyer demand to sell their home after stalling or delaying their home sale.
Buyers need the help of a real estate professional to help them find the right home for them, negotiate terms of sale,
and help with price negotiations. Sellers, as well, turn to professionals to help market their home to potential buyers,
sell within a specific timeframe, and price their home competitively. For-sale-by-owner sales have dropped to the
lowest level recorded in this data set at eight percent of sales again this year, while the use of the agent to sell the home
stays at historic highs. Likewise, the buyer use of the agent is at historic highs as the number of buyers purchasing directly
from a previous owner or through a builder falls.
Characteristics of Home Buyers
First-time buyers made up 34 percent of all home buyers, a decrease from last year?s 35 percent. The typical buyer was 45 years
old this year, and the median household income for 2016 rose again this year to $88,800. Sixty-five percent of recent buyers were married couples, 18 percent were single females, seven percent were single males, and eight percent were unmarried couples. Thirteen percent of home buyers purchased a multigenerational home, to take care of aging parents, for cost savings, and because of children over the age of 18 moving back home. Eighty-nine percent of recent home buyers identified as heterosexual, three percent as gay or lesbian, one percent as bisexual, and seven percent preferred not to answer. Eighteen percent of recent home buyers are veterans and three percent are active-duty service members. At 30 percent, the primary reason for purchasing a home was the desire to own a home of their own.
Characteristics of Homes Purchased
Buyers of new homes made up 15 percent and buyers of previously owned homes made up 85 percent.
Most recent buyers who purchased new homes were looking to avoid renovations and problems with plumbing
or electricity at 36 percent. Buyers who purchased previously-owned homes were most often considering a
better price at 32 percent. Detached single-family homes continue to be the most common home type for recent
buyers at 83 percent, followed by seven percent of buyers choosing townhomes or row houses. Senior-related housing stayed the same this year at 13 percent, with 16 percent of buyers typically purchasing condos and six percent purchasing a townhouse or row house.
There was a median of only 15 miles between the homes that recent buyers purchased and the homes that they
moved from. Home prices increased slightly this year to a median of $235,000 among all buyers. Buyers typically purchased
their homes for 98 percent of the asking price. The typical home that was recently purchased was 1,870 square feet, had three bedrooms
and two bathrooms, and was built in 1991. Heating and cooling costs were the most importantenvironmental features for recent home buyers, with 85 percent finding these features at least somewhat important. Overall, buyers expect to live in their homes for a median of 15 years, while 18 percent say that they are never moving.
The Home Search Process
For 42 percent of recent buyers, the first step that they took in the home buying process was to look online at properties for sale, while 17 percent of buyers first contacted a real estate agent. Seventy-nine percent of recent buyers found their real estate agent to be a very useful information source. Online websites were seen as the most useful information source at 88 percent. Buyers typically searched for 10 weeks and looked at a median of 10 homes. The typical buyer who did not use the internet during their home search spent only four weeks searching and visited four homes, compared to those who did use the internet and searched for 10 weeks and visited 10 homes.
Among buyers who used the internet during their home search, 89 percent of buyers found photos and 84 percent
found detailed information about properties for sale very useful. Sixty-one percent of recent buyers were very satisfied with their recent home buying process.
Home Buying and Real Estate Professionals
Eighty-seven percent of buyers recently purchased their home through a real estate agent or broker, and seven percent purchased directly from a builder or builder?s agent. Having an agent to help them find the right home was what buyers wanted most when choosing an agent at 52 percent. Forty-two percent of buyers used an agent that was referred to them by a friend, neighbor, or relative and 12 percent used an agent that they had worked with in the past to buy or sell a home. Seven in 10 buyers interviewed only one real estate agent
during their home search. Eighty-nine percent of buyers would use their agent again or recommend their agent to others.
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 95 percent of their home compared to repeat buyers at 86 percent.
For 59 percent of buyers, the source of the down payment came from their savings. Thirty-eight 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-three percent of buyers saved for their down payment for six months or less. For 13 percent of buyers, the most difficult step in the
home buying process was saving for a downpayment. Of buyers who said saving for a downpayment was difficult, 49 percent of buyers reported that student loans made saving for a downpayment difficult. Forty-two percent cited credit card debt, and 37 percent cited car
loans as also making saving for a downpayment hard. Buyers continue to see purchasing a home as a good financial investment. Eighty-three percent reported they view a home purchase as a good investment.
Home Sellers and Their Selling Experience
The typical home seller was 55 years old, with a median household income of $103,300. For all sellers, the most commonly cited reason for selling their home was that it was too small (16 percent), followedby the desire to move closer to friends and family (14
percent), and a job relocation (11 percent). Sellers typically lived in their home for 10 years before selling, the same as last year.
n Eighty-nine percent of home sellers worked with a real estate agent to sell their home. For recently sold homes, the final sales price was a median of 99 percent of the final listing price. Recently sold homes were on the market for a median of three weeks, down from four weeks last year. Thirty-seven percent of all sellers offered incentives to attract buyers. This year, home sellers cited that they sold their homes for a median of $47,500 more than they purchased it. Sixty-two percent of sellers were very satisfied with the
selling process.
Home Selling and 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-four percent of recent sellers contacted only one agent before finding the right agent they worked with to sell their home. Ninety 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-six percent of sellers reported that they provided the agent?s compensation. The typical seller has 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 (67
percent) or probably (18 percent) recommend their agent for future services.
For-Sale-by-Owner (FSBO) Sellers
Only eight percent of recent home sales were FSBO sales again this year. For the third year, this is the lowest share recorded since this report started in 1981. The median age for FSBO sellers is 55 years. Seventy-four percent of FSBO sales were by married couples that have a
median household income of $103,100. FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $190,000 last year (up from $185,000 the year prior), and significantly lower than the median of agent-assisted homes at $250,000.
FSBO homes sold more quickly on the market than agent assisted homes. Fifty-eight percent of FSBO homes sold in less than two weeks?often because homes are sold to someone the seller knows. Sixty-eight percent of successful FSBO sellers who knew the buyer were very satisfied with the process of selling their home.