2014 Profile of Home Buyers and Sellers

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Transcript of 2014 Profile of Home Buyers and Sellers

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    2014

    PROFILE OF HOME BUYERS

    AND SELLERS

    National Association of REALTORS®

    Te Voice for Real Estate® 

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    1 National Association of REALTORS®  |  PROFILE OF HOME BUYERS AND SELLERS 2014

    National Association of REALTORS®

    ©2014 National Association of REALTORS®

    2014

    PROFILE OF HOME BUYERS AND SELLERS

    National Association of REALTORS®

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    3 National Association of REALTORS®  |  PROFILE OF HOME BUYERS AND SELLERS 2014

    National Association of REALTORS®

    Contents

    Introduction .................................................................................................................................. 5

    Highlights ......................................................................................................................................6

    Chapter 1: Characteristics of Home Buyers ..........................................................................8

    Chapter 2: Characteristics of Homes Purchased ..............................................................23

    Chapter 3: The Home Search Process .................................................................................43

    Chapter 4: Home Buying and Real Estate Professionals .................................................57

    Chapter 5: Financing the Home Purchase ...........................................................................69

    Chapter 6: Home Sellers and Their Selling Experience ...................................................79

    Chapter 7: Home Selling and Real Estate Professionals ................................................. 98 Chapter 8: For-Sale-by-Owner (FSBO) Sellers ................................................................107

    Methodology .............................................................................................................................117

    List of Exhibits ...........................................................................................................................118

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    5 National Association of REALTORS®  |  PROFILE OF HOME BUYERS AND SELLERS 2014

    National Association of REALTORS®

    Introduction

    F or most home buyers, the purchase of real estate 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 liv-

    ing area. This annual survey conducted by the NATIONAL

    ASSOCIATION OF REALTORS® of recent primary residence

    home buyers and sellers helps to gain insight into detailed

    information about their experiences with this important

    transaction. The information provided supplies understand-

    ing, from the consumer level, of the trends that are transpir-

    ing and the changes seen. The survey covers information on

    demographics, housing characteristics and the experience

    of consumers in the housing market. Buyers and sellers also

    provide valuable information on the role that real estate pro-

    fessionals play in home sales transactions.

     Jessica Lautz

    Meredith Dunn

    Nadia Evangelou

    November 2014

    Buyers continue to face tighter credit standards than in

    previous years. A notable finding from this year’s report was

    the drop in first-time home buyers to a share not reported

    since 1987. Buyers in this year’s profile reported incomes

    continuing to increase, making them more likely to have the

    financial capability to own more than one property. Addi-

    tionally, there is a continuation of trends seen last year of an

    elevated share of married couples and suppressed levels o

    single buyers. Married couples who purchased a home have

    the advantage of more buying power and added financia

    stability—their typical household incomes are higher than

    single households.

    Tightened inventory is affecting the home search pro-

    cess of buyers. Due to suppressed inventory levels in many

    areas of the country, buyers are typically buying more ex-

    pensive homes as prices increase. The number of weeks a

    buyer is searching fell in this year’s report. Buyers continue

    to report the most difficult task for them in the home buying

    process is just finding the right home to purchase.

    Buyers need the assistance of a real estate professiona

    to help 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 com petitively. For-sale-by-owner sales remain at historic lows

    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 buyers purchasing directly from a previous owne

    or through a builder falls.

    This report provides real estate professionals with in-

    sights into the needs and expectations of their clients. Wha

    do consumers want when choosing a real estate profession

    al? How do home buyers begin the process of searching fo

    a home? Why do some sellers choose to forego the assis- tance of an agent? The answers to these questions, along

    with other findings in this report, will help real estate pro-

    fessionals better understand the housing market and also

    provide the information necessary to address the needs o

    America’s real estate consumers.

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    National Association of REALTORS®  |  PROFILE OF HOME BUYERS AND SELLERS 2014 6

    2014 PROFILE OF HOME BUYERS AND SELLERS

    6

    Highlights

    Characteristics of Home Buyers

    n Thirty-three percent of recent home buyers were first-

    time buyers, which is still suppressed from the historical

    norm of 40 percent among primary residence buyers.

    n Thirteen percent of buyers purchased a multi-generational

    home due to cost savings, children over the age of 18

    moving back into the house, and health and caretaking of

    aging parents.

    n The typical first-time buyer was 31-years-old, while the

    typical repeat buyer was 53.

    n The 2013 median household income of buyers was

    $84,500. The median income was $68,300 among first-

    time buyers and $95,000 among repeat buyers.

    n Sixty-five percent of recent home buyers were married

    couples.

    n For 24 percent of recent home buyers, the primary reason

    for the recent home purchase was a desire to own a

    home, while nine percent purchased due to a job-related

    relocation or move, and eight percent bought for the

    desire to be in a better area or a change in family situation.

    Characteristics of Homes Purchased

    n New home purchases continue to drag at a share of 16 percent of all recent home purchases.

    n New home purchasers bought a new home to avoid

    renovations or problems with plumbing or electrical, and

    the ability to customize their home. Home buyers who

    bought previously owned homes purchased their home

    for a better price and overall value and the charm and

    character their home provides.

    n The typical home purchased was 1,870 square feet in

    size, was built in 1993, and had three bedrooms and two

    bathrooms.

    n Seventy-nine percent of home buyers purchased a

    detached single-family home.

    n Thirteen percent of recent buyers over the age of 50

    bought a home in senior-related housing.

    n When considering the purchase of a home, heating and

    cooling costs were at least somewhat important to 86

    percent of buyers and commuting costs were considered

    at least somewhat important by 70 percent of buyers. n Buyers expect to live in their home for 12 years after

    buying.

    The Home Search Process

    n For 43 percent of home buyers, the first step in the

    home-buying process was looking online for properties

    and 12 percent of home buyers first looked online for

    information about the home buying process.

    n Ninety-two percent of buyers use the internet in some

    way in their home search process and 50 percent of buyers use a mobile website or application in their home

    search.

    n Real estate agents were viewed as a useful information

    source by 98 percent of buyers who used an agent while

    searching for a home.

    n The typical home buyer searched for 10 weeks and

    viewed 10 homes—this is two weeks shorter than the

    previous year’s report.

    n

    Approximately nine in 10 recent buyers were at least somewhat satisfied with the home buying process.

    n F