What does the typical homebuyer look like in 2015?
Earlier this week, we reported on first-time homebuyers, and how they are now at their lowest market share since 1987.
That information came courtesy of the 2015 Profile of Home Buyers and Sellers, NAR’s exquisitely detailed examination of consumers and their relationship with housing. As part of our continuing coverage of the 2015 Profile, we’re now examining the overall field of homebuyers, and the many interesting trends and statistics that NAR uncovered.
1. Middle Aged – The median age for homebuyers, NAR reported, is 44 years, though the specific age brackets break down in interesting ways. Only 17 percent of homebuyers are aged 55 to 64 years, while 20 percent are between 35 and 44 years and 28 percent, the largest share, are in the 25 to 34 age group. That latter statistic means that the beleaguered Millennials comprise the largest share of homebuyers in today’s market. Granted, that stat is less impressive than it seems – Millennials are also the largest generation in America’s history, and the scholarship on their financial problems is considerable – but NAR’s report is encouraging nonetheless in that many Millennials are still managing to purchase homes.
2. Middle Income – The median household income for homebuyers remains high at $86,100, which is up from the $84,500 in 2014’s Profile. Twenty-two percent of homebuyer households earned $54,999 and less, while on the opposite end of the spectrum, 40 percent made at least $100,000, a divide that bolsters our recent reports on affluence and affordability in housing.
3. First Comes Love, then…a House? – NAR’s income stats, though, were just one element of its report that resulted in unique economic conclusions; the 2015 Profile’s findings on buyers’ marital status also spoke of today’s housing environment. Sixty-seven percent of homebuyers are married, up from 65 percent a year ago. Meanwhile, the share of single-female homebuyers declined from 16 to 15 percent, while single-male buyers remained flat at 9 percent. From 2005 to 2010, NAR noted, single females comprised one-fifth of buyers, but with home prices rising and housing affordability declining, the stronger purchasing power of married couples has prevailed.
4. Multigenerational Living – Thirty-seven percent of buyers have children under the age of 18 living at home, up from 35 percent in 2014. Meanwhile, 13 percent of homebuyers took on a multigenerational home, meaning a residence with adult siblings, adult children over the age of 18, parents and/or grandparents in the house. Among the reasons for buying a multigenerational home, 21 percent of buyers cited care for aging parents, while 15 percent cited cost savings and 11 percent that adult children were moving back home. With the Baby Boomer population aging rapidly and many Millennials still stuck in the economic mud, multigenerational purchases will likely grow in prominence.
5. Lagging Diversity – Eighty-five percent of homebuyers identity as White/Caucasian, while 6 percent identify as Hispanic, 5 percent as Asian, 5 percent as black and 2 percent as “other.” The West region, NAR found, has the most diverse homebuyers in the country, with 21 percent reporting as non-White. The Midwest, interestingly, is the least diverse, with a whopping 93 percent of buyers being White.
6. English-Dominant – There are at least 350 languages spoken in U.S. homes, according to the Census Bureau, but there is little doubt of English’s prominence among homebuyers. Ninety-six percent of buyers, NAR reported, speak English as their primary language, with even 95 percent of the diverse West region’s buyers speaking English. Interestingly, 91 percent of buyers were born in the U.S., up from 89 percent last year.