The National Association of Realtors 2012 Profile of Home Buyers and Sellers is out and it offers some interesting insight on the market’s activity in 2012.
The annual profile measures the demographics, preferences, motivations, plans and experiences of recent buyers and sellers. Research for this year’s report was conducted by distributing surveys to a sample of 93,502 homebuyers. The results are helpful in analyzing the success and struggles of the market and provide direction for the future.
Most notable from the profile is the significantly larger number of married couples who purchased a home over single buyers in 2012. Sixty-five percent of recent homebuyers were married couples. The highest percentage since 2001, the numbers could be a result of the tightening of loan qualifications and the financial strength that two incomes provided in comparison to a single income.
Another significant – although not surprising – finding in the report is the increase in first-time homebuyers. We have mentioned in previous posts how the market provided unique opportunities for first-time homebuyers locally, so it is interesting to see that the national averages were consistent with our local observations. The report states that of recent homebuyers, 39 percent were first-time buyers, up from 2011. Historically, first-time buyers account for 40 percent of buyers.
Because of the large number of first-time homebuyers, there were several different repercussions in the mortgage industry. First-time homebuyers typically make smaller down payments than repeat buyers. This means there were a large number of FHA mortgages and fixed-rate mortgages. Ninety-three percent of first-time homebuyers chose a fixed-rate mortgage and 46 percent of first-time buyers selected an FHA low down payment mortgage.
Other statistics from the report:
- Thirty percent of respondents’ reason for buying a home was to own a home of their own
- Seventy-eight percent of recent home buyers said their home is a good investment
- Eighty-nine percent of respondents used real estate agents and brokers to purchase a home
Based on all of this information, what can be predicted for 2013?
The increase in first-time homebuyers in 2012 provides the most positive outlook for 2013. As more buyers enter the market, more existing homeowners are encouraged to sell. Coupled together, these factors influence the demand in housing inventory and will spur more construction – as we have already begun to see.
The NAR profile of home buyers and sellers doesn’t provide any concrete evidence for the future, but we can look at the report and assess what the average buyer and seller is looking for and predict whether or not the market will meet those needs.
– Kathy Gyselinck, Executive Vice President of Southeast Mortgage