Homebuyers Keep Getting Older.
Since 1981 the National Association of Realtors has annually produced an informative document called The Profile of Home Buyers and Sellers that reveals important data points about who is buying homes in America. This is a touchy economic subject since home ownership is seen as part of the American Dream yet it is getting harder and harder for younger people to afford them. When you couple that with the affordable housing issues our nation currently faces then you have a problem.
The age of homebuyers has risen to it's all-time high. The median age of a home buyer was 56 years old and that is up from age 49 just one year earlier. This is also true for repeat home buyers.
The people able to buy homes keep getting older.
The median first time home buyer is also up to age 38 with first time buyers representing the lowest share of home buyers in the over 4 decades of tracking.
It’s clear who isn’t buying homes
Young people. In the 1980’s the median first time home buyer was a decade younger in their late 20’s.
Non-white people. 83% of home buyers were white. Part of this statistic makes sense given that white people are the majority demographic in the US. Yet, the home buyer stat skews up almost 10% more than the population average showing some disproportionality.
People with kids under 18. This is a declining home buying demographic since kids cost money. Planning for college, still paying for their own college, helping aging family members and more create this squeeze on families.
There is an old financial rule that your home should only be 3x your income from an affordability and economically viable approach. So, for 60% of US households that make less than $100,000 a year, the home they should approach would be $300,000 or less. The current median home price is over $400,000 according to the National Association of Realtors.
All of this is part of the economic bubble we are currently in. We are gaining assets slower and much later in life than previous generations causing financial strain on the majority of Americans.
Despite the grim news aspect of this it is helpful to know that if you are in your 30’s and do not yet own a home - it's ok! You are not alone.
Here is the link the Profile of Homebuyers report.
Here is a link to a CNBC article that highlights the aging homebuyer.
Best place to send them is to me.
More next time!
Jonathan