The National Association of REALTORS® started the Profile of Home Buyers Sellers survey in 1981. Since that time, NAR has tracked who the recent primary residence buyers and sellers are in the housing market, what they are purchasing, and their use of an agent. When NAR first administered the survey in 1981 it had only 59 questions. In 2021, the survey contained 129 questions.
There are some notable changes in the home buying environment, pandemic aside. In 1981 buyers purchased homes with staggering interest rates of 11.5% to 13%. In the last year, buyers have experienced interest rates at about 3%. Both today and cited in the 1981 report, home buyers faced rising home prices amid a good or better interest rate environment; in 1980, interest rates topped 17% for home buyers.
Home buyers in 1981 buyers were likely to turn to their hard copy newspaper for leads on real estate listings, where buyers today jump online to scroll through listings on their mobile device or computer. Buyers today are more likely to use an agent to purchase their home at 87% compared to 82% of buyers in 1981.
Sellers today are also more likely to use agents at 90% compared to 85% in 1981. When buyers 40 years ago found their home, they were likely to purchase a single-family home, however condos were more commonly purchased at the time, in comparison today. Seventy-six percent of buyers purchased a single-family home and 16% purchased a condo in 1981 compared to 82% and 6%, respectively.
When purchasing, 93% of buyers financed their home purchase in 1981, with just 7% paying all-cash. The share of buyers financing has dropped to 87% of buyers in the last year, as the share paying all-cash has grown to 13%. Interestingly, when repeat buyers purchased in 1981, 67% traded up to a more expensive home, 17% traded down, and 16% stayed in the same price range. Today, that share was 48% trading up, with 29% trading down, and 28% staying in the same price range.
In 1981, 44% of buyers were first-time buyers with a median age of 29. Today, the share of first-time buyers has shrunk to 34% and the median age has risen to 33. In today’s environment, first-time buyers face rising home prices and limited inventory, in addition to headwinds such as student debt that is delaying their home purchase. While the age of first-time buyers has risen, the age of the repeat buyer has also risen from a median age of 36 to an all-time high of 56-years-old in 2021. Americans are living and working longer and as a result feel more comfortable purchasing homes later in life.
The demographics of who is purchasing have changed notably as well. The share of married adults has steadily dropped since the 1980s, and that is reflected in who is purchasing homes. In 1981, 73% of buyers were married. Today, just 60% of home buyers were married. The trend is reflected even more strongly among first-time buyers where the share of married couples dropped from 68% to 50% from 1981 to 2021. Birth rates are also steadily dropping in the U.S. Among home buyers, this trend is also mirrored as 41% of home buyers had children under the age 18 of in 1981. Today that share is just 31%.
For more on what trends have stayed the same, and what has changed, check out the full report here: https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers.