HOME SELLER: Episode 00004 How Do Home Buyers Shop For Homes & Their Characteristics

Summary: 2014 The Home Search Process per NAR • For 43 percent of home buyers, the first step in the home-buying process was looking online for properties and 12 percent of home buyers first looked online for information about the home buying process. • Ninety-two percent of buyers use the internet in some way in their home search process and 50 percent of buyers use a mobile website or application in their home search. • Real estate agents were viewed as a useful information source by 98 percent of buyers who used an agent while searching for a home. • The typical home buyer searched for 10 weeks and viewed 10 homes—this is two weeks shorter than the previous year’s report. • Approximately nine in 10 recent buyers were at least somewhat satisfied with the home buying process. • For more than half of buyers finding the right home was the most difficult step in the home buying process. What Buyers Valued Most Were • Photos (84%) • Detailed property information (82%) • Virtual tours (63%) • Real estate agent contact information (46%) • Interactive maps (43%.) Characteristics of Home Buyers Tightened credit standards for home buyers has suppressed the level of first-time buyers in the market. Among primary residence home buyers, only 33 percent are first-time buyers, while the historical average is 40 percent. First-time home buyers are more likely to be single females and single males and typically have a lower income than repeat home buyers. Due to the lower share of first-time buyers, the data shows a market with a higher share of married couples who have higher household income than seen since the last report. Thirteen percent of recent buyers purchased a multi-generational home. The reasons for purchasing this home type vary from children over 18 moving back into the house to cost savings to the health and caretaking of aging parents, as well as wanting to spend more time with aging parents. Demographic Characteristics of Homebuyers The demographics of home buyers in the last three years have been reflective of tightened credit conditions. Buyers tend to have higher incomes and there is a higher share of married couples in the market. The median age of home buyers rose to 44 years old from 42 years old. The largest share of home buyers is in the 25 to 34 age group, who account for 28 percent of recent home buyers in the market. The 2013 median household income for home buyers rose slightly to $84,500 from $83,300 in the last report. Buyers in the Midwest region tend to be younger, while buyers in the West and South regions tend to be older. Buyers in the West region had the highest incomes followed by buyers in the Northeast. The share of married buyers remained nearly flat from the past year at 65 percent. The single buyer share remains suppressed. Single female buyers only made up 16 percent of buyers while the share of single male buyers is nine percent. In past years, single females made up more than one-fifth of the market place and single males made up more than one-tenth of recent buyers. This suggests that while tightened lending conditions continue married couples are better able to provide the purchasing power needed to buy a home. Thirty-five percent of recent buyers had children under the age of 18 in the household. Thirteen percent of recent buyers purchased a home for a multi-generational household—a home that had adult siblings, adult children over the age of 18, parents, and or grandparents in the household. One-quarter of these homes were bought for cost savings and an additional 23 percent due to children over the age of 18 moving back into the home. Eighteen percent of multi-generational households purchased this household type because of health and caretaking of aging parents, while one in ten purchased this type of home to spend more time with aging parents. Characteristics of Homes Purchased