Gary and Jay write in Your First Home that “Markets go up and down. The reality is, there is no perfect market; there is only the market you're dealing with when buying a home.” Echoing this quote, the 2024 and 2023 markets present challenges and opportunities for buyers.
June is National Homeownership Month, so it's a good time to take a look at the challenges and opportunities facing buyers. To help you become your clients' economist of choice, here are some key takeaways from the National Association of Realtors' (NAR) annual Home Buyers and Sellers Report: If you want some bonus points, you can also find last year's summary here:
First time buyer
Lack of inventory and high interest rates have remained largely stable, with some new construction helping to ease prices and inventory, resulting in more first-time buyers being successful in making a purchase over the past year.
First-time homebuyers will account for 32% of all buyers in 2023, up from 26% in 2022.
The silver lining is that more people are beginning their homebuying journey. The increase over the past year is welcome. 2022 was the year with the fewest first-time homebuyers since NAR began collecting data in 1981. Still, the average for most of NAR's records is 38%, so this market is still below historical norms. The typical first-time homebuyer's age is about the same: mid-30s.
The average age of first-time home buyers has reportedly fallen to 35, down from 36 last year. Student loan debt and the rising cost of living have led people to postpone home purchases until they have more savings. Pride of homeownership remains strong.
More than half (60%) of first-time homebuyers said their primary reason for buying a home was the desire to own their own home.
repeater
Source: KW Research and U.S. Census Bureau
Home sales in 2023 are projected to hit a record 4.1 million, one of the lowest in recent history. That number is the same as in 2008, at the start of the Great Recession, the economic downturn that began in late 2007 and lasted until 2009. Economists are predicting 4.3 million home sales in 2024, roughly the same as in the period from 2009 to 2011, just after the recession. And, as the previous chart shows, sales are trending upward.
Home before legal spouse
Last year, the percentage of married couples among first-time home buyers was the lowest in the past decade, with only 9% of buyers being married. Still, the highest percentage of recent buyers (59%) were married couples. Single women remain a strong group, making up 19% of recent buyers. The continued presence of multigenerational homes
As the cost of living rises along with inflation, many families are finding purchasing power and stability by buying a home to live in with others outside of their immediate family. 14% of homebuyers purchased a multigenerational home with plans to care for aging parents and children while sharing assets. This number remained stable from last year.
For homebuyers riding the changing market tides and taking action, some interesting trends have emerged.
People are moving to avoid the renovations.
45% of recent new home buyers wanted to avoid renovations and plumbing and electrical issues.
Historically high home prices are falling in some markets as markets soften in some areas. Thirty-eight percent of people looking to upgrade reported that they purchased a new home because prices were rising. Speed to lead is key
Though it seems like a timeless trend, first impressions still matter: A staggering 71 percent of buyers only meet with one real estate agent during their home search.
The dream of home ownership is alive and well, and a tough market means real estate agents can offer better advice and service. With interest rates the focus of the real estate industry is on interest rates, agents would do well to keep their ears to the ground in their local market. By keeping an eye on the issues that seem most important to your area, you'll be better placed to help buyers take that next big step.
Looking for more resources on homeownership?
Check out our “Your First Home” webpage for free materials, including information on how to build a real estate dream team and resources on how to determine homeownership standards for your clients. You can also find a complete seminar package, including a customizable presentation, social marketing plan, email templates, checklists, and more, at “Win Big with Seminars: Your First Home.”