While the state residential real estate market continues to set price records, the median household income of buyers continues to increase, a new report from the Massachusetts Association of Realtors has found.
MAR’s 2019 Massachusetts Profile of Home Buyers & Sellers found median household income of buyers rose from $106,900 in 2018 to $119,600 in 2019. Nationally, the median homebuyer made $93,200 per household in 2019. Sixty-one percent of home buyers were married couples, 11 percent unmarried couples, 15 percent single females, and 10 percent single males. Nationally, 61 percent of buyers were married, 9 percent were unmarried couples, 17 percent were single females, and 9 percent were single males.
The median age of home buyers in Massachusetts was 32 years old, compared to 47 years old nationally. Thirty-seven percent of Massachusetts buyers said the primary reason for purchasing a home was the desire to own a home of their own. Nationally, this number was 29 percent.
The report is compiled annually by the National Association of Realtors on behalf of MAR.
There were 59,136 single-family home sales in 2019 – a 1.2 percent decrease from 2018 – with a median sale price of $400,000 – a 3.9 percent increase compared to 2018 and a new all-time record according to The Warren Group, publisher of Banker & Tradesman. There were 24,522 condo sales in 2019 – a 0.03 percent increase – with a median sale price of $380,000 – a 4.1 percent increase from 2018.
The report also contained some hopeful news for first-time buyers: The share of homebuyers purchasing their first dwelling sat at 45 percent in 2019, far above the nationwide average of 33 percent. That figure is up from past years, when the share of first-time homebuyers in Massachusetts stood at 40 percent in 2018 and 42 percent in 2017, a record low. Nationally, that same share was 33 percent and 34 percent in 2018 and 2017, respectively.
“Despite the record-low number home homes for sale and near record-high prices, the percentage of Massachusetts first-time buyers was again higher than the national average,” 2020 MAR President Kurt Thompson, a broker at Keller Williams Realty – North Central in Leominster, said in a statement. “Our state is in demand. This is a trend we want and need to continue, but we still need more homes for sale to ensure that first-time homebuyers of all income levels have the same opportunity to live here.”
The demographic profile of the median seller reflected the gradual generational turnover in Massachusetts’ population of homeowners.
The median age of the home seller was 54 years and had a median income of $138,50, while the US median was 57 years old and $102,900. The typical seller had owned their home for 13 years, while buyers in Massachusetts expect to live in their homes for a median of 15 years. Twenty-one percent of home sellers reported the main reason for deciding to sell was the home was too small, 18 percent cited a change in the family situation, and 16 percent wanted to be closer to friends and family.
More Massachusetts buyers – 88 percent – financed their purchase compared to the national average of 86 percent. Sixty percent of buyers reported using their savings to pay for the down payment, compared to 69 percent in Massachusetts. Of the first-time home buyers in Massachusetts who said that saving for a down payment was the most difficult step (18 percent), 60 percent cited the burden of student loans made saving more difficult, compared to 65 percent the previous year.
Only 20 percent of sellers in Massachusetts offered incentives to attract buyers compared to 35 percent nationally.
“In theory selling a home in this market is easy because of the high demand,” said Thompson. “However, when you combined that with sellers’ growing concern of not being able to find a home to buy after they sell, their satisfaction with the process suffers. The solution is making it easier to produce more housing.”
