America’s homebuyers are older than ever, whiter than in previous years and a higher-than-ever share are repeat buyers.
That’s the conclusion of the National Association of Realtors’ latest Profile of Home Buyers and Sellers report, which is based on surveys of homebuyers conducted between July 2021 and June 2022, a period that saw not only rapid run-ups in home prices, but big increases in mortgage interest rates, as well.
A mere 26 percent of buyers are first-timers, NAR researchers say, down from 33 percent last year and an all-time low since NAR began tracking the data in 1981.
Among the 74 percent of buyers who had previously bought a house, the median age was 59 – the highest on record, NAR said – while the median age of all buyers was 36, another record high.
“It’s not surprising that the share of first-time buyers shrank to the lowest level ever recorded given the housing market’s combination of historically low inventory, persistently high home prices and rapidly escalating interest rates,” Jessica Lautz, NAR vice president of demographics and behavioral insights, said in a statement. “Those who have housing equity hold the cards and they’ve fared very well in the current real estate market. First-time buyers are older as a result of saving for down payments for longer periods of time or relying on a generational transfer of wealth to propel them into homeownership.”
That wealth gap showed in NAR’s research. A full 50 percent of repeat buyers used the proceeds from the sale of a previous primary home to fund their down payment, while 41 percent relied on savings and 7 percent sold stocks or bonds, with very few other options used.
By comparison, first-time buyers primarily relied on savings for their down payment (64 percent), a gift or loan from friends and family (18 percent), a loan or withdrawal from their retirement savings (8 percent) or a tax refund (8 percent). One in 4 first-time buyers said saving for a down payment was the hardest part of their homebuying process thanks to high rents and student loan debt, at a time when bidding wars for homes were common across the country.
By race, white Americans accounted for 88 percent of homebuyers, with Hispanic Americans at 8 percent, Black Americans at 3 percent and Asian Americans at 2 percent. The shares of white and Hispanic buyers were up from 82 percent and 7 percent the prior year, respectively, while Black and Asian buyers’ share of the total population dropped from 6 percent each.
“Housing affordability and limited inventory impacted the buying power of all buyers, however, the greatest impact was felt by Black and Asian Americans, as both groups saw a shrinking share of home buyers,” Lautz said. “Conversely, White and Hispanic Americans experienced gains in buyer shares. Population growth among Hispanic Americans likely drove the increase, while many White Americans are repeat buyers with housing equity that allows them to make easier trades in today’s market.”
