Who is buying homes in today’s market?

Minneapolis, MN:  One thing we know about real estate.  It’s forever changing, and always local.  Here are a few notable items from a recent survey from the National Association of REALTORS®

At the moment, we are seeing two very distinct buyers.

1.  Buyers with higher incomes remain in the market.
2.  First time home buyers

Of course these are not the only people.  Just the biggest percentages, so don’t count yourself out if you don’t fit one of those two crowds.

The income of home buyers has increased 22% since last year, reflecting that ability of buyers with higher incomes to be less affected than others, and still buying homes.  A recent client of mine said “I’m not happy with rates, and prices, but I can afford it.”

Medium household income of buyers the last year rose to $107,000, a big jump up from last year, where it was $88,000.

First-time home buyers  market share has moved to 32%, compared to last year, where it was 26% of market share, showing that regardless of today’s mortgage rates, getting out of that apartment, or worse yet, Mom’s basement is still important.

First time home buyers are also benefitting from less competition and more loan options.  I historically have provided a fair amount of FHA Loans.  Buyers using an FHA loan in 2020 and 2021 were at a huge disadvantage when homes all had multiple offers.  But the last 12 months, FHA loans, and down payment assistance loan buyers have been able to successfully buy again.

Age of Home Owners

Finally, I find this sad, but it looks like that average age of a first time home buyer has climbed up to 35.  I bought my first home at 21, and my oldest son bought his first home at age 20.

• The average homeowner is now 56 years old.
• Among new homeowners who have been in their homes for less than 3 years, the average age is 46 years; the median age is 42.
• 65- to 74-year-olds have the highest homeownership rate among all age groups at 79.5%.
• The median age among homeowners has increased by 21.3% since 2001.
  56.9% of homeowners aged 30 to 34 have been in their homes for 3 years or less.

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