Family and Larger Homes are Driving Moves
More Americans are showing a desire to move closer to their family and friends since the pandemic. They also want to upsize their home, according to the “2021 Profile of Home Buyers and Sellers,” an annual report published by the National Association of REALTORS®, released at the 2021 REALTORS® Conference & Expo. The report analyzes consumer real estate preferences.
Eighteen percent of buyers said they wanted to move closer to family, friends, and relatives, and 17% of repeat buyers also desired a larger home, according to the report.
In previous years, consumers’ top motivators to move were greater convenience to work and affordability. But home preferences are changing. “During the pandemic, buyers and sellers have been driven by the desire to be close to family and friends, as well as the need for a larger home,” says Jessica Lautz, vice president of demographics and behavioral insights at the National Association of REALTORS®.
Here are some additional insights about real estate consumer patterns from the latest report:
Lessening home tenure but expectations to stay longer next time: The pandemic likely was behind homeowners’ decision to shorten their home stays. The tenure in homes decreased from 10 years to 8 years—the largest single-year change in home tenure since NAR began collecting such data. Buyers, however, say they expect to live in their next homes much longer, a median of 12 years, and 18% of respondents said they’re never moving. “Home sellers have historically moved when something in their lives changed—a new baby, a marriage, a divorce, or a new job,” said Lautz. “The pandemic has impacted everyone, and for many, this became an impetus to sell and make a housing trade.”
Selling high and buying at high prices: Sellers have accrued high equity in their homes over the past few months and are seeing those gains when they sell. Homes typically sold at a record pace of one week over the past year, and home buyers typically purchased homes for 100% of the seller’s asking price this year (the highest median recorded since 2002); 29% purchased the home for above the asking price, according to NAR’s report. Home sellers reported selling their homes for a median of $85,000 more than their purchase prices.
The number of married buyers sees slight decline: Sixty percent of repeat buyers were married, a share that has dropped from a high of 81% in 1985. On the other hand, the share of single women buyers rose to 19% from a recent low of 15% in 2014, NAR reports. The share of single men and unmarried couples remained at 9%. Read more: Co-Buying With Friends, Roommates Inching Up
First-time buyers struggle to compete: The share of first-time buyers increased from 31% to 34% over the past year, the largest jump since 2017. However, the numbers could be even higher. First-time buyers are struggling with the higher home prices and buyer competition for a limited number of homes for sale. “As home prices increase, generally first-time buyers are hit hardest because they have no previous home on which to draw equity,” said Lautz. “Furthermore, in the current environment, these buyers also face soaring rent prices and high student debt balances, which makes it extremely difficult to save for a down payment.” Twenty-eight percent of first-time buyers said they used a gift or a loan from friends or family to make a down payment on a home, while 29% said saving for a down payment was the most difficult step in their homebuying journey.
Real estate professionals are in high demand: In the booming housing market, the majority of buyers and sellers continue to turn to real estate agents for guidance. Eighty-seven percent of buyers purchased their residence through an agent or broker; 7% purchased directly from a builder or builder’s agent, according to the report. Ninety percent of home sellers worked with an agent to sell their home, while 7% were for-sale-by-owner sellers and less than 1% sold to an iBuyer. Forty-seven percent of buyers said their agent was referred to them by a friend, neighbor, or relative; 13% used an agent they had previously worked with. Ninety percent of consumers said they would use their agent again in the future or recommend their agent to others.
“REALTORS® stepped up in a tremendous way during this pandemic—both in helping sellers list and sell properties, as well as in aiding buyers in finding their dream home during a time of such scarce inventory,” says Charlie Oppler, NAR’s president. “We saw so many buyers recommend and refer their REALTORS® to family and friends, and witnessed sellers lean on REALTORS® and firms that have helped them in the past.”
This marks the 40th anniversary of NAR’s first Profile of Home Buyers and Sellers report.