Among repeat home buyers and home sellers over the last year, a key factor for moving was the desire to live closer to family and friends, while an equally important motivator was the need for more space or a bigger home. Sellers as a whole were able to benefit in these transactions, typically earning their full asking price, and selling in one week.
These driving forces to move as well as further sales figures appear in the National Association of Realtors’ 2021 Profile of Home Buyers and Sellers, a yearly report – now in its 40th year – that analyses demographics, preferences and experiences of buyers and sellers across America.
“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,” said Jessica Lautz, vice president of demographics and behavioral insights at NAR.
Among sellers, as a group they traded up in price, size and newer residences, as 46 percent purchased a larger home and 28 percent purchased the same size home.
Relocating to be closer to family had been increasing in recent years, according to Lautz, however, the COVID-19 outbreak accelerated that trend.
In past years, convenience to work and affordability had ranked as top factors for reasons to move.
The 2021 NAR report comprises an entire year of research in which buyers and sellers purchased or sold a home during the COVID-19 pandemic. In addition to various other findings, the pandemic likely spurred occupants to shorten their home stay, as tenure in the home decreased to eight years from 10 years, according to the report. This is the largest single-year change in home tenure since NAR began collecting such data.
In general, buyers said they expected to live in their homes for a median of 12 years, while 18 percent said that they were never moving. Historically, tenure in the home has been six to seven years, but experienced an increase to nine to 10 years following the Great Recession.
“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.”
The market over the last year saw homes reach record-high prices, paving the way for sellers to secure maximum profits on transactions and leaving buyers to grapple with historically high housing costs. As a result, home buyers typically bought their homes for 100 percent of the seller’s asking price, with another 35 percent purchasing their home for beyond the asking price, according to the report. This 100 percent median is the highest recorded since 2002. Home sellers reported selling their homes for a median of $85,000 more than their purchase prices, which is a jump from $66,000 last year.
“Buyers moving quickly during the pandemic, coupled with all-time-low inventory, led to a decline in time on market to the shortest ever recorded, which was just one week,” said Lautz. “Only a quarter of home sellers offered incentives to entice potential buyers, down from nearly half of all sellers the year prior.”
Realtors also assisted a number of first-time buyers over the last year, as the report notes the share of first-time home buyers increased from 31 percent to 34 percent, which is the largest jump since 2017. This year, the typical first-time buyer was 33 years old – equal to the previous year. Conversely, the typical repeat buyer age continued to climb, reaching an all-time high of 56 years old.
“As home prices increase, generally first-time buyers are hit hardest because they have no previous home on which to draw equity,” explained 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.”
A notable revelation in the report was the slight decline in married home buyers. This year’s data showed that 60 percent of recent buyers were married, a share that has fallen from a high of 81 percent in 1985. However, the share of single women buyers increased to 19 percent from a recent low of 15 percent in 2014. The shares of single men and unmarried buyers remained at 9 percent, respectively.