Here are a few trends I see in the real estate market for this year.
1. First-time buyers are vanishing.
The first-time buyer share of the market dropped to 26 percent over the past year. Historically, first-time buyers make up 40 percent of the homebuying market. “Housing affordability has shut out first-time buyers with the rise in interest rates and home prices,” says Jessica Lautz, National Association of Realtor’s vice president of demographics and behavioral insights.
2. It’s taking longer to afford a home.
The age of first-time homebuyers rose to 36, a record high. Recent buyers said higher rental costs, car loans, credit card debt and student debt were factors that delayed their entrance into homeownership.
3. Buyers are moving further away.
The median distance purchasers moved from their previous home reached an all-time high of 50 miles. Historically, the median distance moved has been between 10 and 15 miles.
4. Move-up buyers can bring cash.
All-cash repeat buyers jumped to 27 percent of the market over the past year, up from 17 percent in the previous year. “Homeowners have accumulated tremendous housing equity in the last decade,” Lautz says, typically about $210,000. “This has allowed many to avoid holding a property mortgage.”
5. The racial gap remains.
Despite recent reports about spiking homeownership rates among Black, Latino and Asian households, NAR data, which looks at each group’s share of homebuying activity, shows a mixed bag. The share of White and Hispanic-Latino buyers increased over the past year, while the share of Black and Asian American and Pacific Islander buyers decreased. Recent news reports have relied on 2021 census data, while NAR’s data comes from a random, weighted sample of homebuyers who purchased between July 2021 and June 2022.
Tim Kelly Kiernan is a branch manager for Realty One Group.
