A new Zillow analysis has painted a picture of today’s average homebuyer – and they aren’t the buyers from the ‘70s and ‘80s, to say the least. Buyers are older, renting for longer periods of time and are much more likely to be single.
- Renting Longer: Homebuyers are renting an average of six years before making the plunge into homeownership. Whereas in the 1970s, homebuyers were waiting an average of 2.6 years, and 4.4 years in the 1980s.
- A Bigger Chunk of Income on First Home: Americans today are dedicating 2.6 times their annual income to a home, compared to 1.7 times annual income in the 1970s. Zillow attributes the larger chunk of income being allocated to homeownership because millennials are moving to more expensive cities on the coast where there are growing job markets.
- Older Homebuyer: The average first time homebuyer is 33 years old with a median income of $54,340. Homeowners in the late 1970s had nearly the same income, with inflation, but were on average four years younger.
- More Likely to Be Single: Only 40 percent of first-time homebuyers today are married. In the 1980s, over half were married.
“Millennials are delaying all kinds of major life decisions, like getting married and having kids, so it makes sense that they would also delay buying a home,” said Zillow Chief Economist Dr. SvenjaGudell. “We know millennials value home-ownership and want to buy. The next challenge will be figuring out how they can save for a down payment and qualify for a mortgage.”
The National Association of Realtors’ annual Profile of Home Buyers and Sellers found single women now constitute nearly a quarter – 23 percent – of first-time buyers, as reported by The Christian Science Monitor.
“Once upon a time, you’d market a home only to a family,” Steve Melman, director of economic services for the National Association of Home Builders told Dame Magazine. “Only the husband’s income even counted.”
Up until the 1970s, rarely could a woman be approved for a loan without having a husband or other male co-signer. The Fair Housing Act of 1968 and the Equal Credit Opportunity Act of 1974 created better equality, regardless of gender and race, in the lending and buying process. In the 1990s, real estate numbers finally began to reflect powerful numbers of single women purchasing homes.
Whether you’re an MLO, Realtor or other real estate professional, arm yourself with this knowledge and reassure millennials, women and other first-time homebuyers that purchasing a home continues to be one of the best investments an individual can make.