Homebuyer Market Insights

First-time homebuyers are getting older -- reaching a record high of 38 years old this year, according to new data from NAR. That means the "renting stage of life" is elongating, and that means a bigger demand funnel for apartments and single-family rentals. Obviously, high mortgage rates play a big role. But it's not the only factor. Even once rates eventually come down, I'd bet the median age of first-time homebuyers tracks above historic averages. Here's why: 1) Lack of for-sale home inventory putting upward pressure on prices. We've added new homeowners much faster than we've added for-sale homes over the last 8 years. That's an unfavorable supply/demand equation for first-time buyers. We don't build starter homes like we used to. What does get built tends to be located on the outskirts of town, and that serves a need, but not everyone wants to live there. Other well-priced options tend to be older homes in need of repair in less desirable neighborhoods. For a lot of folks, location and condition of the home will matter more than just finding something to buy; and for those households, many will choose to rent. 2) "Delayed adulthood." Long before mortgage rates shot upward, we've seen a gradual trend in Americans waiting longer to get married and have kids. The typical first-time married couple is late 20s (women) or 30+ (men). The typical mother having her first child is now in her late 20s. Both are up considerably not just since the Leave it to Beaver days, but even up over the last 10-20 years. Marriage and children are typically life stage factors driving households to purchase a home. Waiting longer for these life stage events elongates the renting stage of life. And some may even choose until their kids are of school age before looking to "settle down" in a neighborhood with good schools long term. 3) Increased quality and professionalization of rental housing. This is the most underrated factor. In the old days, we lived in rental housing because we had to for a stage of life. Even in the best options were typically in so-so locations with minimal amenities and came with the pains of having to wait in lines at a leasing office (apartments) or track down a passive manager (SFR) by phone. No more. Apartments are getting built in great neighborhoods with condo-quality amenities and finish-out. SFR now comes with a lot more bells and whistles, with more full-time active management available via apps etc. The "little things" add up. This doesn't mean all these would-be buyers will stay renters forever. I don't believe in the idea of a massive increase in the so-called "perma-renter" in a nation that highly incentivizes homeownership, with 2/3 of households homeowners. Our elected officials will find ways to make homebuying easier. But I do think, structurally, we're seeing a longer "renting stage of life" for all the reasons noted above -- and that's another demand tailwind for apartments and SFR. #renting #housing #homeownership

The Evolving Face of the US Homebuyer The National Association of Realtors' (NAR) 2024 report provides a fascinating snapshot of the US housing market’s buyer profile that looks significantly different than it did just a few years ago. The data reveals a changing homebuyer. The average buyer age has climbed to a record 56, underscoring the impact of high housing costs and rising interest rates that have sidelined younger would-be buyers. For first-time buyers, the average age is now 38, nearly a decade older than it was in the early 1980s. These changes signal a more mature buyer who brings accumulated wealth and likely more significant financial security to the table. Additionally, a fifth of all home purchases were made by single women, a notable demographic shift reflecting both a societal change in homeownership goals and an economic shift in who can afford to buy. By contrast, single men comprised only 8% of recent buyers. This snapshot highlights what many are calling a “bifurcated housing market,” where those able to buy homes are increasingly established, wealthier individuals, often using home equity from previous properties to secure cash purchases or make substantial down payments. This market has been largely inaccessible to younger buyers, who continue to face affordability challenges, limited savings, and reduced opportunities for financial support in the form of lower mortgage rates. With affordability gauges near record lows, first-time homebuyers hold a mere 24% share of the market, down dramatically from the 40% share held in pre-Great Recession years. Rising prices and interest rates have compounded these barriers, leading to a market where nearly three-quarters of all buyers have no children under 18 at home, reflecting an older and more established buyer profile than in decades past. While this report offers a look back, the trends it captures underscore a potential turning point. Recent mortgage application data suggests that prospective buyers who had previously been priced out or sidelined may begin to re-enter the market as interest rates stabilize. If these sidelined buyers do return, particularly younger and more diverse demographics, the profile of the typical buyer could again start to shift, gradually increasing diversity in age, household composition, and race among homebuyers. At Havas Edge, we’re continually analyzing these demographic shifts to support brands in delivering timely, targeted strategies that meet the realities of today’s buyers and the anticipated resurgence of those who’ve been waiting on the sidelines. #RealEstate #Homebuyers #MarketTrends #HousingEconomics #ConsumerInsights

Good news for first-time homebuyers: For Sale signs keep popping up & price cuts are surging. The number of active listings increased by 17% in June to five-year highs, according to Zillow. Homes are staying on the market for longer and 27% of the listings in June had price cuts, the most for June since tracking started in 2018. And in some major metro markets like Atlanta, Miami and Austin, buyers are now calling the shots, not sellers. Of course, none of this means the affordability crisis is over -- especially not with mortgage rates flirting with 7%. But there are glimmers of hope for people trying to get into the housing market.

I’ve worked with thousands of first-time homebuyers and the loan officers who serve them. What I’m seeing right now is a mindset shift, away from “revenge spending” to what I’d call “revenge saving with purpose.” Millennials and Gen Z aren’t just cutting back on lattes. They’re taking on “no-buy challenges,” cutting travel, skipping festivals, not out of frugality, but because they know what they’re up against. The median home price is over $400,000. Rent hikes, inflation, and lingering student loans have made saving not optional, but existential. The harsh realtity is that the real cost of buying a home isn’t just the down payment. It’s also closing costs, moving expenses, utility deposits, home maintenance, and higher insurance premiums. That’s where most first-time buyers get blindsided. But “revenge saving” can close that gap if it’s intentional. That means: Categorizing spending and building flexible budgets Automating deposits into a high-yield savings account Tracking credit and financial progress with real tools And most importantly, starting 12–24 months before they’re ready to apply That’s the mission behind the KeySteps, powered by FinLocker which lets homebuyers build financial fitness in real time, with budgeting, credit monitoring, and a homeownership readiness plan all in one place. As for what to do with the savings? High-yield savings accounts (HYSAs) are a smart move for near-term liquidity. But I’d avoid locking it in a CD or IRA unless the home purchase is several years out. Flexibility matters. Revenge saving works best when it’s paired with guidance. That’s why I tell every aspiring buyer: talk to a mortgage advisor before you’re “ready.” The best time to build your plan was a year ago. The second-best time is today. #VieauxPoint

New home sales, which are recorded when contracts are signed, jumped 4.1% in September after the prior three months were revised slightly lower. Sales are now at the highest level in 16 months and 6.3% higher than a year ago. The Northeast and the South reported the highest sales growth. Newly built home sales are reflective of recent market conditions, like the significant drop in the 30-year fixed mortgage rate that occurred from early August to the end of September. Markets began to price in more Federal Reserve rate cuts, which pushed the 30-year rate to a multiyear low of 6.08%. That trend began to reverse in early October. Market participants now believe fewer rate cuts are likely due to recent strong economic data. The inventory of newly built homes available for sale fell to 7.6 months' supply at the current sales pace. Builders have been offering mortgage rate buydowns to lure buyers. Larger builders have the ability to offer discounts, which is evident in their lower-than-average inventory for sale. More homes are being sold before construction has even started compared to a year ago. Permits for single-family home construction are picking up, a sign that builders are more optimistic about future demand. Separately, existing home sales, which are recorded at the contract closing, slumped 1% in September, a 3.5% decline from a year ago. That was the second consecutive monthly decline and the weakest annualized pace of existing sales since October 2010. The median sales price keeps climbing. The overall supply of existing homes for sale remains constrained, despite increases in listings. There was about a 4.3 months' supply available in September, well below the five-to-six-months' supply needed for the market to achieve balance. The first-time buyers' share remains at an all-time low of 26%. That is well below the norm of closer to 40% and a testimony to the affordability hurdles. Everything from supply constraints and the upward pressure on prices to higher insurance and real estate taxes is curbing affordability. Existing home sales reflect activity from a few months prior so we should see a bump from the downdraft in mortgage rates as we move into the winter months. Those gains could be short-lived, given the volatility in mortgage rates, which rose again in October. Many buyers are waiting on the sidelines for mortgage rates to fall further before they buy. #housing #mortgages Read more: https://lnkd.in/gHRMBmQT

Housing Market: The New vs. The Old It seems the #housing_market has been divided into two segments. In one, we have a sellers’ market; in the other, buyers enjoy their options. Last week, I wrote about the homebuilders waiting to see a further decrease in interest rates, which encourages more demand. This week, the numbers for the sales of newly built homes are out, and it seems the homebuilders’ strategy is paying off. However, the sales of existing homes have dropped to the lowest level in 14 years. The New First, let’s discuss the price. The median sales price of a newly built home reached $426,300 in September, up from $410,900 in August, a 3.7% increase. Second, the sales of newly built homes are up by 4.1%. The market witnessed an annual rate of 738,000 newly built homes sold in September from 709,000 in the previous month. With the price and quantity of newly built homes rising, there is undoubtedly an increasing demand for new homes in the market. The Old If the market for newly built homes is warming up, the market for existing homes is not. The National Association of REALTORS® reports that existing home sales dropped to a seasonally adjusted annual rate of 3.84 million in September, exhibiting a 3.5% drop from September 2023. The drop in existing homes took place while the 30-year #fixed_rate #mortgage declined by as low as 6.08% in September (Freddie Mac). The total housing inventory of registered existing homes has been increasing. In September, it increased by 1.5% from August and 23% from the previous year, reaching 1.39 million units. The existing homes stay in the market slightly longer as well than August, 28 days compared to 26 days. There are options, and buyers are taking their time shopping around. Looking at the single-family home sales, we see that the median price was $409,000 in September, up 2.9% from the previous year. The median price for existing condos reached $361,600, marking a 2.2% increase since the previous year. The prices are modestly rising, with the number of transactions falling. Homeowners are also waiting for the opportune moment. The Numbers Game As always, buying a home comes with doing the numbers. Homeowners looking to sell their homes are concerned about giving up a larger share of their #home_equity to cover transaction costs. Homebuilders do not have this problem. They gain by selling more homes instead of insisting on a price point for one house. They have more financial resources and access to less expensive capital. They can cover closing costs, realtors’ commissions, and mortgage buybacks. They know that as the supply of newly built homes is slow to increase, homebuyers have few choices regarding newly built homes. #Homeowners are at a disadvantage if they try to sell their homes. However, many homeowners benefit from low mortgage rates and know their equity is poised to increase further. For now, we have the tale of two markets. The Fed's next move could bring them closer.

As the real estate landscape in Mumbai and the MMR continues to evolve, it's clear we are entering a new era of value-driven homeownership especially in the Rs 1–1.5 crore segment. I am honored to have shared my insights in *Times of India* article: “Home Run in MMR” which explores the dynamic market trends making this price bracket highly attractive for mid-income buyers. From shifting buyer sentiment and increased affordability to the emergence of infrastructure-ready micro-markets, the story covers why this window is such a sweet spot for first-time homeowners and upgraders alike. As I mentioned in the piece: "Thane has emerged as a hotbed of value-driven housing choices... with prices for a 2-BHK home at an average of Rs 1.5 crore. If timed well, this is a wait-and-watch segment with promise.” 🔍 The data shows increasing launches, improved infrastructure, and better financing options are making it the “right time to buy” A big thank you to the editorial team and my peers quoted in the piece. I look forward to continuing conversations on how we can serve today’s evolving homebuyers with smarter, better located, and more accessible housing. Would like to hear your thoughts : Are we heading into the most buyer-friendly phase in MMR real estate? #RealEstate #MumbaiHousing #MMR #AffordableHousing #Homebuying #Proptech #TimesOfIndia #RajkumarSingh #Anarock #MarketInsights

Home values. At the beginning of the year we were all worried that 7% mortgage rates would kill the housing market. Home values were destined to plummet due to the onslaught of higher rates. Values have held and even started to recover. This is due to homeowners staying put. Who is benefiting? Home builders. Crushing it right now as they have the confidence that there are still buyers willing to step up and purchase new homes. "Millions of American homeowners have been reluctant to sell because they can't afford to give up the low mortgage rates they have now. Only 1.08 million existing homes were for sale or under contract at the end of May, the lowest level for that month in National Association of Realtors data going back to 1999" "new construction has become the only game in town. Newly built homes accounted for nearly one-third of single-family homes for sale nationwide in May, compared with a historical norm of 10% to 20%. Existing-home sales in May fell 20% year-over-year, while new single-family home sales that month rose 20% on an annual basis" "Builders aren't erecting enough homes to offset the shortage of existing ones on the market, meaning buyers in many places still face bidding wars. On a national basis, home prices have only declined a small amount from their record highs in spring 2022" "By April, builders forecast a 7% increase in sales for 2023" "Builders nationwide are focusing on cutting costs and building smaller homes with lower price tags. Nationally, the proportion of new homes sold in May for under $300,000 rose to 17%, the highest level since December 2021" #housing #mortgage #rates https://lnkd.in/gt63bi5z

For the first time in recent memory, new homes are cheaper than old ones. The latest Census data pegs the median new-home price at $401,800, roughly $33,000 less than an existing home, which clocks in at $435,300, per the National Association of Realtors. Why? Builders are sitting on the largest pile of unsold finished homes in 16 years, thanks to high mortgage rates scaring off buyers. To move inventory, 66% of builders are dangling sweeteners like mortgage rate buydowns, closing credits, and free appliances, the highest incentive rate in five years. Investors are taking note, swapping fixer-uppers for turnkey rentals with warranties, lower upkeep (1% vs. up to 5% of value for older homes), and faster tenant fill-ups. The bottom line is that new construction isn't just cheaper upfront, it's often cheaper to own. With incentives, energy savings, and maintenance baked in, the math is increasingly favoring those new builds. For investors and would-be homeowners alike, the "used is cheaper" rule no longer applies in housing, at least for now.

Homeownership for young families has been fundamentally reshaped. The median age of a first-time homebuyer hit 38 in 2024, and for many millennials, buying the same home their parents owned now demands six times more income. We're in a housing Ice Age, where monthly mortgage payments on a median-priced home surged by 60% in four years, unmatched by wage growth. Meanwhile, roughly 77% of outstanding mortgages carry rates of 5% or lower, with 45% at 3.5% or less. This inevitably leads 80% of these low-rate holders to refuse to pay a mobility tax. So the market is stuck. This crisis extends beyond just transactions. Housing dictates quality of life, impacting education, health, and economic opportunities. It is a root cause of the fertility crisis, as young couples struggle to afford a two-bedroom home to start a family. There is a powerful solution: assumable mortgages. Buried in 1980s federal housing law is $1.4 trillion worth of 2-3% FHA/VA mortgages that buyers can legally take over from sellers. This is not theoretical, it exists today and we're facilitating them at Roam. Assumable mortgage transactions have surged 127% in the last two years. The median age of our homebuyers is 35, compared to 57 for traditional buyers. 88% of our customers are married couples in their 30s, looking to start or grow families. They cannot wait for rates to drop. Instead, they are finding creative solutions. Housing affordability is the issue of our generation, and we are committed to turning this low-rate time machine into a widespread reality — so much more than just housing is at stake.