Presentation: 2014 Profile of Home Buyers and Sellers

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Transcript of Presentation: 2014 Profile of Home Buyers and Sellers

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    John L. Scott

    Convention

    Jessica Lautz

    National Association of REALTORS

    October 30, 2014

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    Methodology

    Survey conducted with recent home buyers who purchased a homebetween July 2013June 2014

    Survey consists of 127 questions

    Seller information gathered from those home buyers who sold a home

    Mailed 72,206 questionnaires- response rate of 9.4%

    Names obtained from Experian

    Data in the presentation is based on medians or the typical buyer in thecategory and is not all encompassing

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    Share of Home Sales

    2014 Investment and Vacation Home Buyers Survey

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    Buyer Demographic Changes

    Profile of Home Buyers and Sellers

    2010 Profile 2011 Profile 2012 Profile 2013 Profile 2014 Profile

    Median Age 39 45 42 42 44

    Gross HHIncome

    $72,200 $80,900 $78,600 $83,300 $84,500

    HouseholdComposition

    58% marriedcouples,20% singlefemales, 12%single males,8% unmarriedcouples

    64% marriedcouples,18% singlefemales,10% singlemales,7% unmarriedcouples

    65% marriedcouples,16% singlefemales,9% singlemales,8% unmarriedcouples

    66% marriedcouples,16% singlefemales,9% singlemales,7% unmarriedcouples

    65% marriedcouples, 16%singlefemales, 9%single males,8%unmarriedcouples

    Children inHome

    35% 36% 41% 40% 35%

    Own a 2ndHome

    14% 19% 19% 19% 21%

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    Shift in Household Composition

    2014 Profile of Home Buyers and Sellers

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    2014 Profile of Home Buyers and Sellers

    Rise in Household Income

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    First-time Buyer Share Remains Under Historical Norm

    Profile of Home Buyers and Sellers

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    Young Adult Homeownership RateHome Prices Outpacing Incomes

    (under 35 years old)

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    Desire of Gen Y to Buy is Still Present

    59 percent of young renters (18 to 39) believe owning a homemakes more sense, but 73 percent of young renters also believeit would be difficult to get a mortgage today

    75% believe home ownership is an important long-term goal

    73% believe ownership is an excellent investment

    24% already own their home and an additional 60% plan to buya home in the future.

    Fannie Mae, 2013 Demand Institute Housing and Community Survey

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    Primary Reasons for Buying a Home

    All Buyers

    First-time

    Buyers

    Repeat

    BuyersDesire to own a home of my own 24% 53% 9%

    ob-related relocation or move 9 4 12

    Desire for a home in a better area 8 2 11

    Change in family situation 8 5 9

    Desire for larger home 7 1 10

    Affordability of homes 5 8 3

    Desire to be closer tofamily/friends/relatives 3 1 4

    Retirement 3 * 5Establish a household 3 7 1

    Desire for smaller home 3 * 4

    Financial security 3 6 1

    2014 Profile of Home Buyers and Sellers

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    BuyersView of Homes as a Financial Investment

    AllBuyers Marriedcouple Singlefemale Singlemale Unmarriedcouple

    Good financial investment 79% 79% 78% 81% 83%

    Better than stocks 40 39 46 40 37

    About as good as stocks 27 27 25 24 33

    Not as good as stocks 12 13 7 17 13

    Not a good financialinvestment 7 7 6 8 6

    Don't know 14 14 15 12 12

    2014 Profile of Home Buyers and Sellers

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    Expenses that Delayed Saving for Downpaymentor Saving for Home Purchase

    2014 Profile of Home Buyers and Sellers

    All

    Buyers

    First-time

    Buyers

    Repeat

    Buyers

    Share Saving for Downpayment was Most

    Difficult Task in Buying Process:

    12% 23% 7%

    Debt that Delayed Saving:Credit card debt 50% 45% 58%

    Student Loans 46 57 28

    Car loan 38 42 32

    Child care expenses 17 13 24Health care costs 12 8 17

    Other 8 5 14

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    Where to go?

    57 million Americans or 18.1% of thepopulation live in a multi-generationalfamily household in 2012,

    double the number who lived insuch households in 1980

    Of those who are 25-34:

    20% of the unemployed live with

    parents 12% of employed live with parents

    Pew Research, Federal Reserve Bank of New York

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    Multi-generational Home

    All

    Buyers

    Married

    couple

    Single

    female Single male

    Unmarried

    coupleMulti-generationalhousehold 13% 13% 13% 16% 7%

    Reasons for purchase:

    Cost Savings 24% 21% 24% 31% 36%

    Children over 18 movingback into the house 23 26 23 17 3

    Health/Caretaking of agingparents 18 19 18 14 22

    To spend more time with

    aging parents 10 12 8 6 14Other 24 22 26 32 25

    2014 Profile of Home Buyers and Sellers

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    Pent Up Demand

    2000 2013

    Existing Home Sales 5.2 m 5.1 m

    New Home Sales 880 K 430 K

    Mortgage Rates 8.0% 4.0%

    Payroll Jobs 132.0 m 136.4 m

    Population 282 m 316 m

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    Seller Wanted to Sell Earlier But Waited or StalledBecause the Home Was Worth Less than the Mortgage

    2014 Profile of Home Buyers and Sellers

    0%

    10%

    20%

    30%

    40%50%

    60%

    70%

    80%

    90%

    100%

    All Sellers 1 year orless

    2 to 3years

    4 to 5years

    6 to 7years

    8 to 10years

    11 to 15years

    16 to 20years

    21 yearsor more

    16%3%

    2%

    12%19%

    26% 22%12% 8%

    8397 97

    8678

    72 7787 91

    No, sold home when I wanted to sell Yes, but rented home to others and lived elsewhere

    Yes, and lived in home

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    Actual Tenure Among Sellers Remains High

    Profile of Home Buyers and Sellers

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    Expected Tenure Remains High

    Profile of Home Buyers and Sellers

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    Force Buyer to Move Again

    Married

    couple

    Single

    female

    Single

    male

    Unmarried

    coupleMove with life changes (addition to family,marriage, children move out, retirement, etc.) 40% 55% 49% 44%

    Never moving-forever home 24 24 15 16

    Move with job or career change 20 9 13 20

    May desire better area/neighborhood 9 7 12 13May outgrow home 7 4 7 14

    Will flip home 1 1 3 3

    Other 6 5 7 4

    2014 Profile of Home Buyers and Sellers

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    Home Type and Location

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    Home Type Bought

    84% previously owned homes

    Even if new home58% used an agent to buy!

    79% detached single-family home

    Where?

    50% suburb

    20% small town

    16% urban

    11% rural area

    3 bedrooms/2 baths

    1,870 square feet

    Built in 1993

    12 miles from past residence for buyers

    2014 Profile of Home Buyers and Sellers

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    Location, Location, Location

    Quality of the neighborhood

    Convenient to job

    Overall affordability of homes

    Convenient to friends/family

    Convenient to shopping

    Quality of school district

    Design of neighborhood

    2014 Profile of Home Buyers and Sellers

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    Commuting Costs

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    Environmentally Friendly FeaturesGood for Earth andWanted by clients

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    Compromises on Home Purchase

    All

    Buyers

    First-time

    Buyers

    Repeat

    BuyersPrice of home 23% 25% 21%

    Size of home 20 27 17

    Condition of home 18 19 17

    Lot size 16 18 15Style of home 16 18 14

    Distance from job 14 18 11

    Distance from friends or family 7 9 6

    Quality of the neighborhood 5 6 5

    Quality of the schools 4 7 2

    Distance from school 2 3 1

    None - Made no compromises 33 25 36

    2014 Profile of Home Buyers and Sellers

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    Inventory Still Tight

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