Throughout the year we’ve seen our fair share of changes within the real estate sector. The market has shifted from being one of low interest rates and low inventory to one of higher interest rates but still low inventory.
In this blog, we will take a look at a few takeaways from the current profile of both buyers and sellers based on data reported from July 2021 to June 2022.
First Time Buyers Dropped from 34% to 26%
First-time buyers made up just 26% of all homebuyers in the year ending June 2022, down from 34% the year before, according to NAR’s 2022 report on homebuyers and sellers. That was the lowest in the survey’s 41-year history. For first-time homebuyers, the lack of affordability is playing a key role in holding them back from homeownership. They have to save while paying the substantial rise in rent prices vs current homeowners who are locked in with a set interest rate.
Who Successfully Purchased Homes in the Past Year?
No matter their circumstances, homebuying hasn’t been an easy feat for just about anyone. Buyers who made it happen over the past year tended to likely not be people of color. Minorities continued to make up just a fraction of buyers as discriminatory housing policies from decades past and banking practices that penalize lower-income communities continued to hinder homeownership. Just 3% of all buyers were Black, 2% were Asian, and 8% were Hispanic. An overwhelming 88% were white. The main hurdle comes down to affordability though. With the majority of home seekers being first-time buyers, they don’t have the equity of a current home to assist with down payments.
Buyers who made it happen over the past year tended to be older, in better financial shape than the general public, and white. Those are the statistics per NAR reporting.
How Far Buyers Moved, Jumped
Because of the jump in remote and hybrid workplaces, homebuyers seem less interested in buying in the potentially expensive area where they currently live. The rise in this new way of working allowed buyers to separate themselves from the city and markets that were unaffordable in price. For a lot of people, something had to give in the equation, and location was usually the answer.
