Eric Berman

If you haven’t heard, we have a significant inventory problem in Massachusetts. While our state is a very desirable place to live, we simply don’t have enough homes to meet the demand. Yet, there are always buyers and sellers in the market. But who are they?

To get to the answer, the Massachusetts Association of Realtors has been working with the National Association of Realtors Research Division since 2003 to produce our annual Massachusetts Profile of Home Buyers and Sellers Report. The profile doesn’t only focus on our state, but also compares our buyers and sellers to the rest of the country. Here are some of the key findings from 2018.

Buyer Demographics

The median household income of Massachusetts buyers rose to $106,900 in 2018 from $101,700 in 2017. The median income of buyers nationally was $91,600. Fifty-eight percent of local home buyers were married couples, 18 percent unmarried couples, 15 percent single females and 10 percent single males. Nationally, 73 percent of buyers were married.

The median age of homebuyers in Massachusetts was 42 years, compared to 46 years nationally. An equal proportion of first-time homebuyers in the state were between 25 and 34 years old and between 35 and 44 years at 26 percent. Only 2 percent were 18-24 years old.

The average home in Massachusetts was built in 1970. Only 9 percent of buyers in 2018 purchased new homes, an increase from 4 percent in 2017. By comparison, the average American home was built in 1991. What the report doesn’t say, but we know to be true, is that it’s very difficult to build new housing in Massachusetts.

The report also found that 91 percent of local homebuyers worked with a real estate professional when buying their home. Nationally, that number was 86 percent.

First-Time Home Buyers

So, who are the first-time homebuyers in Massachusetts? In our state, first-time buyers made up 40 percent of all buyers in 2018. This was better than the national average of 33 percent, but down from 42 percent of all Massachusetts buyers in 2017. It’s a good bet that our lack of homes and high prices contributed to the decrease.

Regionally, the state’s share of first-time homebuyers fared better than the Midwest (35 percent), the South (30 percent) and the West (29 percent), but slightly worse than the Northeast as a whole, which had a total share of 45 percent of first-timers in 2018.

Seller Demographics

The median age of the home seller was 55 years and they had a median household income of $119,300 (the U.S. median was $98,800). The typical seller in Massachusetts owned their home for 13 years. Nineteen percent of sellers reported the main reason for deciding to sell was the home was too small, while 10 percent reported that their home was too large. Ten percent cited a change in their family situation, 10 percent wanted to be closer to friends and family and another 10 percent found that their current neighborhood had become less desirable.

Regardless of the reasons for wanting to sell, 94 percent of all Massachusetts home sellers worked with a real estate professional to sell their homes. Nationally, the average was 91 percent.

While home values are near all-time highs, the survey also found that 11 percent of sellers in Massachusetts, and 8 percent nationally, had to delay the sale of their home because the value of their home was worth less than their mortgage. The number of Massachusetts sellers who chose to sell their home without an agent or for sale by owner  was 5 percent, up from 3 percent but below the national level at 7 percent.

Paying for a Home

With the high cost of housing in Massachusetts, 87 percent of all buyers in the state financed their home purchase. For first-time buyers, that number jumped to 96 percent compared to 81 percent of repeat buyers. Sixty-nine percent of people reported using their savings to pay for the down payment. When breaking it down further, the study found that 86 percent of first-time buyers used savings compared to 43 percent of repeat buyers who were able to tap equity from the sale of the home and other resources.

The study also confirmed what Realtors have heard from their clients for years – that it’s difficult to save for a down payment in Massachusetts. Seventeen percent of first-time homebuyers said saving for a down payment was the most difficult step, with 65 percent of buyers citing the burden of student loans made saving more difficult, compared to 52 percent the previous year.

 Eric Berman is the director of communications for the Massachusetts Association of Realtors.