Super-low inventory and quickly rising prices largely framed this year’s housing market.
But a closer look at 2018’s buyers and sellers reveals other intriguing real estate trends, captured by a new report from the National Association of Realtors.
Here are five big takeaways:
Marriage not needed:
The share of married couple buyers hit the lowest point since 2010 at 63 percent. Single females made up the second-largest buyer group at 18 percent, following by single males at 9 percent and unmarried couples at 8 percent.
The decline in married couples reveals that marriage is no longer a prerequisite to buying a home. “You don’t need a ring,” says Jessica Lautz, director of demographics and behavioral insight for the NAR.
Tough for first-timers:
Low inventory for entry-level homes and rapid price increases continue to befuddle first-time homebuyers. This year, the share of first-time buyers fell to 33 percent, down from 34 percent last year and well below the historical norm of 40 percent.
“They didn’t bounce back,” Lautz says.
Almost a quarter of first-time homebuyers (23 percent) moved directly from their parents’ homes before purchasing a house, a new high. Lautz notes that may be how some first-timers can compete in today’s market. “They’re not stuck in a lease and its time frame,” she says. “They can save for a down payment because they’re not paying rent.”
First-time homebuyers contributed a median 7 percent of the sales price to their home purchase, up from 5 percent last year and the highest level since 1997. Overall, buyers put down 13 percent, up from 10 percent in 2017 and the highest since 2005.
Older Repeat buyers:
Repeat buyers are getting older. The median age was 55 years, up from 54 last year and an all-time high for the survey.
Lautz says that these younger Boomers are healthier than their counterparts in the past, so they don’t need to move to an assisted-living facility or downsize, which has become less and less common. “Many are purchasing multi-generational homes and taking care of parents, or their children are moving back home,” Lautz says.
Many homeowners who bought their homes eight to 10 years ago at the peak of the previous housing bubble also stalled their home sale as they waited to regain equity. That’s another reason repeat buyers could be older.
Student loan woes:
College debt remains a significant challenge for potential homebuyers. Almost a quarter of all buyers reported having a median of $28,000 in student loan debt, while two in five first-time buyers said they had a median of $30,000 in education debt.
Of the 13 percent of buyers who said saving for a down payment was the hardest part of buying a home, half said their student loan debt had hampered their ability to save for a home purchase or down payment.
“Even with a thriving economy and an abundance of job opportunities in many markets, monthly student loan payments coupled with sky-high rents and rising home prices make it exceedingly difficult for potential buyers to put aside savings for a down payment,” NAR’s chief economist, Lawrence Yun, said in a statement.
The share of homebuyers with children under 18 reached the lowest point in the survey's 37-year history at 34 percent, mirroring recent low birthrates in the country, says Lautz. “This changes the neighborhoods buyers are looking at. Schools are a reduced preference. Some buyers may be willing to move to up-and-coming neighborhoods more than before.
Additionally, buyers without children may be content with houses with less than three bedrooms, no recreation room or even a townhome or condo if they don’t see children in their future. Many buyers also are interested in how their homes work for their pets. Fifteen percent of buyers this year said it was important that their home is close to green spaces or a veterinarian for their pets. This is the first time the NAR posed this survey questions.
“It’s less about the babies with two legs,” Lautz says, “and more about the fur babies with four legs.”