This year has gotten off to a great start in the real estate world and as I am a statistics lover, I thought I’d share some provided by the National Association of Realtors (NAR). Each year, NAR does a national buyer survey to gather statistics about trends and profiles. In July of 2018 they released the report of their 2017 results. Here are some highlights and insights.
Of all homes purchased in 2017, 33% were first timers who had a median income of $75,000. I found this interesting as this reflects the attainability of going from renting to owning. To piggyback on that a majority, 84% to be exact, felt buying their own home was a wise investment. The tough part? Saving for a down payment. Student loans were their biggest obstacle followed by credit cards and car payments. To all the young’ns out there prioritize your spending! Paying money on a mortgage is far wiser than toward credit debt or car loans. As for the student loans, talking with a lender or financial advisor as to the best route for them having the least impact on your credit worthiness is a great use of your time. Each scenario is different and it’s better to listen to the experts than advertisers of refinancing programs. That may be the best option but educating yourself (yes, I meant to do that) before moving forward is always better.
Speaking of down payments, the percentage greatly increases with repeat buyers. According to the study, the typical first timer put down 7% and financed the balance. The repeat buyers, on the other hand, were putting 13% toward their new home. I see a few things to note here. It is a misconception of many 20% down is required before purchasing a home. That’s simply not the case anymore, especially for first time buyers. Note not even repeat buyers are putting that much down. A big factor of this is the low interest rates of the last several years. Leveraging your money allows you to diversify your investments and broaden your portfolio. If you are a repeat buyer I’d recommend chatting with your financial advisor as well and learn how your money will best work for you.
In 2017 half of buyers found the home they bought on the internet. That would be the pajamas and coffee stage of the process I wrote about a couple weeks ago. The number two slot? Real estate agents, of course! A whopping 28% followed by yard signs/friend or neighbor each at 7%, builders at 5% and lastly only 2% directly from the owner. That’s eye opening, isn’t it? And here’s another piggyback: of all the people who purchased a home 87% used a real estate agent or broker. That percentage has steadily increased from 69% in 2001. Why? Because it looks easy on TV but it’s not. There are many steps to getting from contract to close and having a professional by your side is the best way to get there.
Have a topic you’d like me to write about? Then let me know! Until next week…
Melissa Berube, 2019 MBOR President