As the housing market continues its gradual recovery, who are today’s home buyers and what motivates them to make a purchase?
Recent analysis from the National Association of Homes Builders of the latest American Housing Survey (AHS) provides insight into recent home buyers and the home buying process. Conducted in odd-numbered years by the U.S. Census Bureau, the 2013 AHS studied 13.7 million households that bought a home in the previous two years.
While the number of households buying a home had been falling since 2005, the number of recent home buyers actually doubled between the 2011 and 2013 surveys. Of these 13.7 million households, 43% were buying their first home, while 11% were purchasing a new home.
In general, new home buyers are older, make more money, and are purchasing bigger, more expensive homes. On the other hand, first-time home buyers are younger, make less money, and are purchasing smaller, less expensive homes.
Home buyers said the top two reasons for choosing a home were its size and room layout or design. The house’s price and the neighborhood came in tied for third. However, for first-time buyers, price was the top consideration.
When asked about making their neighborhood selection, home buyers noted their top reasons for choosing a neighborhood as “the house itself” and safety. First-time home buyers, who have a median age of 32, also seem to prioritize a healthy home-work balance. Proximity to job and friends/family tended to be more important to this group of buyers.
The size of a purchased home hasn’t changed much in recent years. In fact, the median size of all homes purchased has been 1,800 square feet since 2005. However, the median size of new homes bumped up from 2,100 square feet in 2011 to 2,200 square feet in 2013.
So how long does it take buyers to find the right home? Home buyers looked at 10 different homes before deciding which one to purchase.
And when they’re ready to commit to their new home, about half of the buyers used their savings for a downpayment while 17 percent used the sale of a previous home. Only 11 percent purchased their home without a downpayment. This includes cases where a home was purchased in full with cash and when a home was purchased with a zero-downpayment loan.
As economic and job growth continue, and interest rates remain low, more consumers are finding that now is a great time to buy a new home. Contact your local builders association to learn about new homes available in your area.