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REALTORS® continue to guide buyers through the home purchase process
Results from the 2009 National Association of REALTORS® Profile of Home Buyers and Sellers
By Jessica Lautz, NAR Research
The National Association of REALTORS® (NAR) surveys home buyers and sellers annually to gather detailed information about the home buying and selling process. These surveys provide information on buyer and seller demographics, housing characteristics and the experience of consumers in the housing market.
Buyers and sellers also share information on the role that real estate professionals play in home sales transactions. NAR’s Profile of Home Buyers and Sellers reports – based on results of those surveys – provide real estate professionals with insights into needs and expectations of their clients.
This year’s data provide valuable insight into how buyer and seller demographics have changed based on shifting market conditions. The latest 2009 NAR Profile of Home Buyers and Sellers was released during NAR’s annual Conference and Expo in November. Below we highlight some of the findings of that survey report that focus on home buyers.
Homebuyer demographics: Who’s buying
One of the most important changes in this year’s survey was shaped by record home affordability and the availability of the first-time home buyer tax credit – the share of first-time buyers. Over the last 10 years, first-time purchasers have accounted for 40-41 percent, on average, of all home buyers during the course of a year. In the 2008 Profile, the share of first-time purchasers was 41 percent. But the 2009 survey results show that 47 percent of all purchasers of homes between July of 2008 and June of 2009 were first-time buyers. This is the largest share of first-time buyers in more than 18 years.
While there is really no “typical” home buyer, the survey results do give us a snapshot. The typical first-time home buyer was 30 years old – similar to the median age of the previous survey – with a median income of $61,600 (in 2008). Repeat buyers were typically 48 years old with a median income of $88,100. One-quarter of first-time buyers are single females, and 12 percent are single males. The share of married couples is smaller among first-time buyers than repeat buyers, 49 percent in comparison to 69 percent.
Two-thirds of first-time buyers purchased a home because of their desire to own a home. Repeat buyers purchased their home for a large variety of reasons, including a job-related relocation or move, the desire for larger home, and change in family situation.
What they bought
What a buyer purchased depends greatly on the quality of the neighborhood, convenience to job, overall affordability of homes, convenience to friends and family, and the quality of the school district. Whether a buyer was a first-time or repeat buyer, the majority of home buyers purchased a detached single-family home. As in previous surveys, first-time buyers were more likely to have purchased a townhome, condominium or duplex than were repeat buyers as their starter home.
A larger percentage of home buyers this year reported purchasing a previously-owned home compared to a new home. A new question was added this year to track the age of home purchased. The typical respondent reported purchasing a home that was built in 1991.
Once buyers find the home they are looking for, they plan to stay in their home for 10 years. Younger buyers of 18 to 24 expect a shorter tenure of seven years, while those over the age of 45 expect to stay in their newly-purchased home for 15 years.
The home search
As in previous surveys, buyers report that they used a variety of information resources when they searched for a home. The 2009 Profile reveals that the Internet and real estate professionals are the most frequently-used resources. With the Internet having an ever-greater number of resources, more than one-third of buyers, and three percent more than in 2008, actually began their search for homes by looking online for properties for sale. An additional 11 percent began their home search by finding information online about the home buying process and 18 percent started by talking to an agent.
Nine out of ten home buyers used the Internet as one of the information sources in their home search process. First-time home buyers were even more likely to use the Internet. A real estate agent was the second most frequently cited information source with 87 percent of home buyers talking to an agent.
Interestingly, the value of sources the buyers used varied significantly. While the Internet was the most frequently cited information source, real estate professionals were rated among more buyers as a more useful source than the Internet.
The role of real estate professionals
Home buyers still rely heavily on the expertise of real estate agents to navigate the housing market and help guide them through the home sales transaction. More than three-quarters of buyers purchased their home through a real estate professional, a slightly lower percent than last year. It is important to note that purchasing a home through a foreclosure rose from three percent in 2008 to 10 percent in 2009.
So what benefits did buyers have when using their real estate agent? Eight in ten first-time buyers benefited by having their real estate agent help the buyer understand the process. While 48 percent of repeat buyers also reported this as a benefit, the highest ranked benefit repeat buyers had when using an agent was that the agent pointed out unnoticed features and faults with property.
The good news for real estate professionals? Their clients are very satisfied with the services they receive from agents. More than 95 percent of buyers said they were very or somewhat satisfied with their agent’s honesty and integrity, their agent’s knowledge of the home purchase process, and their knowledge of the real estate market. Satisfaction translates into repeat business for real estate professionals. Almost 9 out of 10 buyers surveyed indicated they would either definitely or probably use their agent again or recommend their agent to others.
In summary
Buying a home is a complex and at times can be a daunting process. There are many options as well as constraints that households face when searching for the right home that will meet their needs today as well as in the future. While the recent unsettled economy has added another layer of uncertainty for would-be buyers to consider when and if they should complete a real estate transaction, the majority of home buyers continue to rely on the services and expertise of real estate professionals to assist them with their transaction.
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