Lately, a specific trend among the 2019 profile of home buyers has caught a bit of attention. Overall, the ages of home buyers have increased from a median of 31 in 1981 to 47 in 2019. Although many analysts may contribute that rise to the increasing age of first-time buyers, there’s more to the story.
The average age of a first time buyer from 1981 to 2018 fluctuated between 28 and 32 years old. The biggest change has just recently occurred in 2019 though with the median age rising to 33 years old. Even though this change is minuscule, it’s enough of a change to know that there are other factors at play. There are now new hurdles that first-time buyers must navigate in order to enter homeownership. There are issues saving enough money for a down payment, affording the rising cost of rentals, and overcoming student loan debts. As if it weren’t enough, there is also a scarce supply of affordable entry-level properties. The new home owners that do enter the market often overcome these challenges with family help such as down payment assistance, or the ability to move directly from a parent’s home into homeownership.
Repeat Home Buyers:
The demographic that changed the most since 1981 has been the repeat buyers. Their median age of 36 back in 1981 is now 55. The big jump is likely due to a variety of factors. For example, many people are staying in their homes for longer periods of time either because they want to, or because they can’t afford to go anywhere else. Also, since Americans are now living and working longer, adding the debt of a mortgage after retirement sounds less and less lucrative. Working and assisting a grown child through college now takes precedent over downsizing. Many parents also hold onto their home because they expect their adult children to boomerang back after college since the job market is so tough.
Luckily, many homeowner have been able to put themselves in a positive home equity type of situation. Since home prices have dropped, the ability to upgrade into something bigger, something more functional, or even to a different geographical location have all become achievable possibilities for those who once felt trapped. What is of note of these home buyers who are a median age of 55 is that the plan on staying in their homes for 15 to 20 years, and many are never planning to move. If that holds, that is yet to be seen.