Impact of Rising House Prices on

Home Buyers & Sellers

NAR Conference & Expo

November 4, 2017

Jessica Lautz
Managing Director Survey Research & Communications
Research Team
@JessicaLautz
 Myths About Home Buying

Millennials never
Will buy everything Online replaces
want to own
onlineeven home word of mouth
ANYTHING
 Just the Facts, Maam

Minorities are Largest generation Drop in Marriage

Growing are Millennials Rates
 Rise in Household Income Successful Buyers
$95,000 $97,500
$88,800
$80,000 $85,700

$74,000 $75,000
$65,000

$58,600
$50,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
All Buyers First-time Buyers Repeat Buyers

Profile of Home Buyers and Sellers

 First-time Buyers Remain Suppressed
60%
50%

40%
34%

30% 32%
20%

Historical norm is 39% among primary residence buyers

%
1981
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Profile of Home Buyers and Sellers
 Median Age of Home Buyers
55 54

50
45
45

40
36
35
32
30
29
25
1981
1985
1987
1989
1991
1993
1995
1997
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
All Buyers First-time Buyers Repeat Buyers
Profile of Home Buyers and Sellers
 First-time Buyers: Marriage is Not Required
80% 75%

60% 68% 57%

40%
27% 18%
20%
16%
7%
% 2%

Married Couple Single Female Single Male Unmarried Couple Other

Profile of Home Buyers and Sellers
Inventory is Top Struggle with Buying Process
Finding
the right
property
54%

Under- Getting a
Paperwork standing
mortgage
22% process
16% 9%

Saving for No
the down difficult
payment steps
13% 16%
2017 Profile of Home Buyers and Sellers
 12

0
3
6
9
1987
1989
1991
1993

Profile of Home Buyers and Sellers

1995
1997
1999
2001
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Median Weeks Home On Market
11

2013
2014
2015
2016
3

2017
Low Inventory Driving Prices
67
months of
price
increase

4.2
months
supply Inventory
fallen 28
consecutive
months
 Affordability Problems Increasing
80% homeowners good time to buy vs
60% renters

78% think its a good time to sellHIGH

60% difficult qualify for a mortgage &

66% difficult save for a downpayment

58% think community only affordable to

average and above incomes

HOME 2017
 Knowledge Gap Among Non-Owners

87% non-owners think

they need 10%+ for Typical
downpayment
downpayment for
first-time buyers 5%

Aspiring Home Buyers, 2017

 Difficulty Saving for Downpayment
30%
25% 26% 25%
23%
20%
20%
16% 17% 17%

10%
7% 7% 7% 7% 6% 7%
5% 5%

0%
2010 2011 2012 2013 2014 2015 2016 2017
First-time Buyers Repeat Buyers
Profile of Home Buyers and Sellers
 How Can You Save?

Median Student Loan

Debt: $41,200 Median Income:
$38,800

Student Loan Debt and Housing Report

 32% not
happy in job

25% changed 30% job

careers/sector outside field

21% BORING 24% took 2nd

job job
Student Loan Debt and Housing Report
 Long-
term

Savings for
40% savings

retirement
impacted
starting a
business
 Non-Homeowners: Delay from Buying a Home
100% Median Delay: 7 years
83%

80%

60%

40%

20% 7% 5%
3% 2%
%
Yes, impacted No impact on No, helped Don't know Don't want to
ability to ability own
purchase

Student Loan Debt and Housing Report

 Reasons Non-Owners Dont Own Due to Debt
Cant save for a downpayment

Not financially secure enough

Cant qualify for a mortgage: debt-to-income ratio

Cant afford preferred home/ neighborhood

Student Loan Debt and Housing Report

 Among Homeowners: Delay Selling and Buying
a New Home
No, student loan debt did not delay selling 45%
home
Yes, too expensive to move and upgrade to a 21%
new home
Yes, problems with student loans have 4%
impacted credit for a future mortgage
Yes, underwater on house because student 3% Median Delay: 3 years
loan debt has limited ability to pay

% 10% 20% 30% 40% 50%

Student Loan Debt and Housing Report

 Buyers with Student Loan Debt

All Buyers First-time Buyers Repeat Buyers

Have student loan debt 26% 41% 19%

Median amount student loan debt $25,000 $29,000 $24,000

Profile of Home Buyers and Sellers

 Prior Living Arrangement of First-time Buyers
100%
82%
73%

21%
12%
0%

Rented Owned
Lived w/ parents, relatives or friends Rented the home purchased
Profile of Home Buyers and Sellers
 Home Buyer Price Divide

Family/friend help African-

w/ downpayment: American/Black
16%-6% more buyer: 36%-7% less
Asian/Pacific Buyer w/ student
Islander buyer: loan debt: 9%-4%
39%-17% more less
 First Step is Online Dream

Only 8% 1st reach out to bank/mortgage lender

 Where Clients Come From

70% of Among
54% buyers 64% sellers
buyers & members
used agent used agent
74% sellers 40% from
referrals or referrals or
only repeat
repeat repeat
contact 1 clients &
client client
agent referrals

Profile of Home Buyers and Sellers and Member Profile

 What Buyers Want: Find the Right Home

Honesty/Integrity
Knowledge Experience/Reputation

Purchase Real Estate

Communication Responsiveness
Process Market

Profile of Home Buyers and Sellers

 What Sellers Want

Honesty/Reputation/Trustworthy

Sell in Find a
Price
Market Home Timeframe (Qualified)
Competitively
Needed Buyer

Profile of Home Buyers and Sellers

 Maintain Relationships: Expected Tenure
16
15

12
10
9
8
6
4
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
First-time Buyers Repeat Buyers

Profile of Home Buyers and Sellers

 4
8
1985 12

5
1987
1989
1991

Profile of Home Buyers and Sellers

1993
1995
1997
2000
2002
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Actual Tenure in Home is Elevated

2014
2015
2016
10

2017
 0%
50%
100%
1981
1985
1987
1989
1991

Real estate agent/broker

1993
1995
1997
2000
2002
2004
2005
2006
Builder/builder's agent

2007
2008
2009
Buyer Use of Agents

2010
2011
Previous owner

2012
2013
2014
2015
2016
87%

2017
 Agent-Assisted Sales at All-Time High
100%
89%

50%

21%
15%
8%
0%
1981
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
All FSBO (For-sale-by-owner) Agent-assisted Other
Profile of Home Buyers and Sellers
 Apple Pie and Homeownership
8 in 10 part of
their American
Dream

Pie 9 in 10 want
to own in
the future
Housing Opportunities and Market Experience (HOME)
 Babies With 4 Legs

99% part of family & Important: 85% large

89% would not give enough home & undertook
up pet due to 95% housing renovations for pet
housing community

Animal House: Remodeling Impact

Find More from NAR Research
facebook.com/narresearchgroup

@NAR_Research and @JessicaLautz

economistsoutlook.blogs.realtor.org

pinterest.com/narresearch/

instagram.com/narresearch/

www.nar.realtor/research-and-statistics