Wednesday, April 25, 2012
NAR® 2011 Home Buyer Survey Results
National Association of Realtors® 2011 Home Buyer Survey Results –
First-Time Home Buyer Statistics.
First-time home buyers made up 37% of all homes purchased: 2011 FTHB by Area 2010 46% Northeast 56%
35% Midwest 51%
34% South 46%
42% West 52%
Tip: Still, over one-third of all homebuyers are buying for the first time. In this article, you’ll also learn that 92% of FTHB researched the Internet (websites, social media, blogs) before deciding which home to buy and which real estate agent to use. I suggest that you align your marketing with the way FTHB find information – but more on that later.
Living arrangements prior to buying their first home:77% of FTHB rented (i.e., an apartment or a home) prior to buying their first home. This is up 2% from 2010. 19% lived in a home—a decrease of 2%. Broken down by marital status:
2011 Living Arrangement 2010
49% Single Female 52%
47% Single Male 55%
37% Unmarried 67%
58% Married 45%
Tip: Over three-quarters of first-time home buyers are living in apartment complexes, and it is still the number one way to market to them even before they start the home search process.
Marital Status of FTHB:
The big change is the increase of married couples buying their first home.
2011 Marital Status 2010 54% Married 48%
12% Unmarried 12%
21% Single Female 23%
12% Single Male 15%
Tip: If you are holding home-buying seminars, consider segmenting them into “Couples Only” or Singles-Only” First-Time Home Buying seminars. You may want to segment the “singles-only” to “divorced FTHB’s.” Each segment has its own set of home buying and loan approval issues.
Median age of FTHB:
This is about the same as last year.
2011 Median Age 2010
9% Age 18-24 11%
52% Age 24-35 56%
20% Age 35-44 19%
Average Income of FTHB:
Big change here. A single male’s income significantly decreased while a single female’s income increased slightly.
2011 Income 2010
73,200 Married 71,200
69,800 Unmarried 62,600
46,300 Single Female 46,100
52,800 Single Male 47,900
Purchase Price Range:No big changes here over last year, however the lower-priced homes have had a slight increase. It’s probably due to the fact that the home values have been decreasing.
2011 Price Range 2010 10% < 75K 6%
12% 75K > 100K 11%
12% 100K > 125K 15%
14% 125K > 150K 15%
10% 150K > 175K 12%
TIP: While some areas are more affordable than others, 48% of FTHB purchased a home at $150,000 or less. This is a great reason to review your past database of your closing transactions to ask for referrals and offer special financing options like FHA, VA and USDA (if the buyer qualifies).
Moving distance from current residence: The distance from where a FTHB is living now to their new home is 12 miles. That has not changed over the last 3 years. It’s the same if living in an apartment or with parents/family.
TIP: If you are marketing to apartment complexes, consider the location of the complex in relation to the housing price ranges for FTHB. Check to see if the subdivisions within a 12-mile radius have housing prices at $150K or below. If not, you may not want to market to those complexes.
Information source prior to buying a home: The typical buyer who used the Internet is 42 years old (up from 37 yrs. in 2010) with an average income of $83,700. The typical buyer who did NOT use the Internet is 60 years old (Up from 57 yrs. in 2010) with an average income of $60,300. Those using the internet took twice the amount of time to find a home versus those that did not use the web. Interesting?????
2011 Info Resource
92% Searched for home on web prior to buying
88% Searched for Real Estate Agent online
53% Yard signs
40% Open Houses
28% Newspaper ads
17% Homes magazines
TIP: If you are spending money advertising in your local homes’ magazines or if you are paying to publish listings in the newspaper, you may want to reallocate your money to online marketing instead.
Financing the home purchase:
It is about the same as last year—95% of home purchases were FIXED RATE Mortgages.
2011 Types of Financing 2010 30% Conventional 27%
54% FHA 56%
6% VA 7%
5% Other 5%
TIP: When it comes to fixed rate mortgages, be different than everyone else and instead of offering a 30-year term, give them an alternative 25-year fixed rate option. The payment is a little higher per month, but the interest savings is significant ($30K for $100,000) and they build up equity quicker. Think about this—if more homebuyers took or were offered a 15, 20 or 25 year fixed rate mortgages in 2005-2006, there would be a lot less people upside down on their homes.
Source of down payment:
The percentages has increased over the last 3 years, indicating that people are buckling down and saving more money.
2009 – 61% from own savings – 22% Gift Funds
2010 – 74% from own savings – 26% Gift Funds
2011 – 79% from own savings – 26% Gift Funds
TIP: Fannie, Freddie, FHA and VA have their own “gift fund rules.” For example, there are 5 different ways funds can be gifted for FHA loans. They are complicated and just one little error will hold up your closing.
FTHB Tenure in Resale of Home: 2011 Resale Tenure 2010 2% Sell home 2-3 yrs. 3%
12% Sell home 4-5 yrs. 16%
3% Sell home 6-7 yrs. 4%
15% Sell home 8-10 yrs. 14%
TIP: It used to be that the average time people plan to sell their home and buy another one was 7 years. Looks like the two new timeframes are from 4 to 5 years and from 8 to 10 years. Plan to stay in touch with past clients for the long haul.