09/02/2020
According to the 2014 NAR Profile of Home Buyers and Sellers,1 first-time home buyers accounted for 33% of all home purchases in the United States. Historically, the norm is 40% among primary residence buyers, so the 2014 market share is below what has been typical. In 2010, the study reported that 50% of all home sales were for first time buyers, which was the highest since 1991 which reported 44% first time buyers.
Since the market recovered significantly between 2010 and 2014, this makes sense. Think about the state of the market between 2008 and 2010. While a large number of current homeowners during that time period were struggling to avoid foreclosure, first time home buyers were seizing the opportunity to take advantage of the low prices, not to mention the continuation of the first-time home buyer tax credit through April 2010. 13% of first-time home buyers cited this tax credit as the primary reason to buy now (that number was 17% for buyers age 18-24). However, with the residential market stabilization since 2010, the “steals” because of short sales, foreclosures, and REO properties, have become less common so the ratio of first time buyers in 2014 appears to have reverted and actually fallen below the long term averages.
The median age of the first-time home buyer in 2014 was 31 and the median income was $68,300. Buyers expected to stay in the home for 12 years, which is longer than had been reported in previous years’ surveys.