There are 5 Significant Ways Home Buyers Have Changed! How has the pandemic shifted buyers’ priorities?
Buyers have changed! When homebuyers decide where they want to live, some factors are more important than others. The pandemic has undoubtedly rearranged many buyers’ priorities. While the quality of the neighborhood is still buyers’ top priority by a substantial margin, other considerations have changed. Factors Influencing Neighborhood Choice 63% Percentage of respondents 2019 Quality of neighborhood 46% Convenient to job Finding a home that’s close to friends and family moved into the second spot, gaining four percentage points in two years. The prevalence of remote work diminished the importance of commuting for many buyers, prompting this factor to decline four percentage points since the pandemic emerged. Despite a rapid escalation in home prices, buyers ranked the overall affordability of homes five percentage points lower in 2021 versus 2019. However, single buyers and married couples were substantially more likely to be concerned about affordability (44-45% of these respondents prioritized this factor) than married couples (36%).
Who Clamored for Larger Homes?
Much has been said since the onset of the pandemic about buyers seeking bigger houses to help them manage the reality of spending more time at home. How is this trend reflected in NAR’s research? Who is feeling most crowded? Longing for more space has grown in importance for buyers, collectively, since 2019. Over the past two years, this factor moved up one position and became buyers’ second-highest priority behind the sheer desire to be a homeowner. However, interest in larger houses was noticeably higher among married couples (increasing four percentage points) and buyers with children in the home (up five percentage points) compared to other buyers.
Fewer Buyers are Married Couples.
Traditionally, the majority of homebuyers were married couples. This is still true, although the share of married couples who are buying a home has steadily declined over the past four decades from a high of 81% in 1985 to 60% last year. According to U.S. Census Bureau data, this trend mirrors an overall decline in marriage rates. 19% 9% 2% Single Female Single Male Unmarried Couple Other 2021 Source: NAR Profile of Home Buyers and Sellers 4. Buyers have been getting older. Compared to 1981, the median age of homebuyers is notably higher, rising from 31 to 45 years old. In addition, repeat buyers reached a record high of age 56 in 2021. The rising age in repeat buyers likely reflects the general aging of the U.S. population and a trend to work longer before retirement. Low mortgage interest rates could also be allowing more buyers to feel comfortable purchasing a home later in life. If fewer buyers are married couples, who are taking their place? Among other heads of households, single women made substantial homeownership gains over 40 years, rising eight percentage points. They’ve also been the second-largest group of homeowners consistently. Single males have been a steady but significantly smaller share of homebuyers, while unmarried couples have become a growing presence.
Buyers Have Been Getting Older.
Compared to 1981, the median age of homebuyers is notably higher, rising from 31 to 45 years old. In addition, repeat buyers reached a record high of age 56 in 2021. The rising age in repeat buyers likely reflects the general aging of the U.S. population and a trend to work longer before retirement. Low mortgage interest rates could also be allowing more buyers to feel comfortable purchasing a home later in life.
Buyers are Less Likely to Have Children
According to the Centers for Disease Control, U.S. births reached a new low in 2020, down 4% from 2019. This is the sixth consecutive year that the birth rate has declined and the lowest number of births since 1979. Additionally, a growing share of childless adults don’t plan to have children, according to a study by Pew Research released late in 2021. Forty-four percent of non-parents under age 50 said they are “not too likely “or “not at all likely” to have children compared to 37% of respondents in 2018. Percentage Distribution, 1981-2021 60% 50% 40% Declining birth rates can also be seen in NAR’s surveys of homebuyers. For example, in 2021, the share of buyers with children under age 18 dropped to 31%—the lowest level since 1981.
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