Thinking of buying a home? Perhaps you’re considering selling your home instead? The mortgage market in 2017 has seen some significant changes compared to previous years. The profile of the average buyer and seller is different when compared to even just last year. A great deal of information can be gleaned from the 2017 Profile of Home Buyers and Sellers by the National Association of Realtors (NAR) that was recently released.
To help you understand what’s happening out there, here is your complete guide to the mortgage market in 2017: the buyers, the sellers, and those that are sitting it out.
Who is Buying?
Building a basic profile on the typical home buyer reveals that the average age of the borrower entering the mortgage market is increasing. Back in 1981, the median age of a homebuyer was 31 years old. Now? It’s all the way up to 45 years old. That’s not all. Not only are homebuyers getting older on average, but they are also needing to earn more money.
Most buyers are looking for the classic American home in the suburbs. Between the city and the suburbs, 85% of the survey indicated suburbia was their preference. In addition, another 83% reported that a stand-alone, single family home with a yard was their preferred type of housing. The suburbs are desirable for two reasons. First, this is where the homes with the most desirable features are located. In addition, suburbs are generally far less expensive than an urban property.
Who is Selling?
Compared to buyers, sellers are far older. They average 55 years old and their income was on average +25% greater than buyers. Industry experts say that the Baby Boomer generation is downsizing to retirement homes far later in life than previous generations. In general, sellers tend to stay in their homes for about 10 years before transitioning to a new home.
Houses listed have been selling quite fast in 2017. Last year, they remained on the market for about four weeks. This year, the average home was sold within just three weeks. Those homes that were put up for sale earned on average nearly $50,000 more than the purchase price and nearly all of them received the asking price.
These are all strong indications that this year has been a very strong seller’s market.
Who is Biding Their Time?
With the age of sellers and buyers increasing at such a dramatic pace, the demographic that is waiting their turn is obviously the younger generation. There are several reasons for this trend. First, housing prices continue to increase in nearly every market nationally. Higher housing prices means higher down payments for borrowers to save. With rental prices also increasing as well as the cost of education, many millennials are having to wait before looking for their first home.
The average of first-time buyers in the housing market historically has been around 40%. For 2017, the number dropped down to 34%. Of those first-time buyers, the median age is 32 years old and 41% have existing debt around $30,000.
Pacific Union Financial
Pacific Union Financial, LLC is a full-service mortgage lender providing mortgages, refinancing, and loan servicing across the country and around the corner. With expertise in home loans for credit levels from best to bruised, we’d love to help you enjoy all the benefits of homeownership. Get in touch today and let us show you how we work hard to make mortgage easy.