Buying a home is no small accomplishment, especially in recent times. Over the decades, buyers’ circumstances and priorities change. Some trends slowly evolve while others hit hard and fast.
The most recent significant shift appeared in the form of a sudden, life-altering global pandemic. Its impact on homebuyers has been evident over the past two years and will undoubtedly continue to shape buyer trends and preferences for years to come.
Other trends have evolved more slowly and in tandem with underlying societal shifts. For four decades, NAR has been tracking and analyzing consumers’ behavior and attitudes in its annual Profile of Home Buyers and Sellers.
Deciding where to live is one important factor for buyers that has shifted since the pandemic. The quality of the neighborhood is still buyers’ top priority by a margin of 18%. Finding a home close to friends and family now comes in the second spot. Convenience to jobs has now moved to 3rd. Despite the escalation in home prices, affordability of homes is 4th overall. However, single buyers were more concerned about affordability than married couples.
Much has been said since the onset of the pandemic about buyers seeking bigger houses to help them manage the reality of spending more time at home. Longing for more space has grown in importance for buyers, collectively, since 2019. Over the past two years, this factor moved up one position and became buyers’ second-highest priority behind the sheer desire to be a homeowner. Interest in larger houses was noticeably higher among married couples and buyers with children compared to other buyers.
Traditionally, the majority of homebuyers were married couples. This is still true, although the share of married couples who are buying a home has steadily declined over the past four decades from 81% in 1985 to 60% last year. According to the U.S. Census Bureau data, this trend mirrors an overall decline in marriage rates.
If fewer buyers are married couples, who are taking their place? Among other heads of households, single women made substantial homeownership gains over 40 years, rising eight percentage points. They’ve also been the second-largest group of homeowners consistently.
Single males have been a steady but significantly smaller share of homebuyers, while unmarried couples have become a growing presence.
Compared to 1981, the median age of homebuyers in notably higher, rising from 31 to 45 years old. In addition, repeat buyers reached a record high of age 56 in 2021.
The rising age in repeat buyers likely reflects the general aging of the U.S. population and a trend to work longer before retirement. Low mortgage interest rates could also be allowing more buyers to feel comfortable purchasing a home later in life.
According to the CDC, U.S. births reached a new low in 2020, down 4% from 2019. This is the 6th consecutive year that the birth rate has declined and the lowest number of births since 1979. Additionally, a growing share of childless adults don’t plan to have children, according to a study by Pew Research released late in 2021. Forty-four percent of non-parents under age 50 said they are “not too likely” or “not at all likely” to have children compared to 37% of respondents in 2018. Declining birth rates can also be seen in NAR’s surveys of homebuyers. For example, in 2021, the share of buyers with children under the age of 18 dropped to 31% – the lowest level since 1981.
First-time home buyers are a key indicator of sustainable real estate markets. Historically, they represent 40% of primary residence homebuyers. However, numbers have remained below 40% since 2011. In 2021, first-time homebuyers had 34% of the share – their highest level since 2017. The ability to work remotely and move to more affordable areas helped some first-time buyers. Additionally, down payment assistance from family and living with family were also contributers.
Source: NAR Profile of Buyers and Sellers – https://cdn.nar.realtor/sites/default/files/documents/2021-highlights-from-the-profile-of-home-buyers-and-sellers-11-11-2021.pdf