Economists' Outlook

Housing stats and analysis from NAR's research experts.

Trading Up and Trading Down: The Times Are A Changin’

Repeat home buyers have the option of trading up for a bigger home, purchasing a home similar in size, and trading down to a smaller home. This change in home size often corresponds to life changes. For instance, empty nesters will often trade down to a smaller home when children leave and they want less space to maintain. Young families that expect more children will often trade up in size to accommodate more people under one roof.

The Profile of Home Buyers and Sellers has collected data since 2003 on the changing size of homes purchased by home buyers. Size often corresponds to home price. Similar in fashion, the Profile of Home Buyers and Sellers has also tracked the changing price of homes purchased by home buyers since 2008.

In 2015, only 42 percent of home buyers traded up in the size of their home. Twelve years prior in 2003, home buyers were more frequently trading up in size at 55 percent. Since 2009, where 54 percent of home buyers traded up, we see a steady decline in the number of home buyers trading up. In 2004, we saw a peak in home buyers trading up to a larger home at 57 percent, and in 2014 we saw a low in home buyers trading up at 40 percent.

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Also in 2015, we see a peak in home buyers trading down in size at 31 percent, the largest segment that traded down in the last twelve years. In 2005, roughly a decade prior, home buyers trading down was at its smallest group with just 20 percent of all buyers. Since 2011, the share of home buyers trading down in size has steadily increased.

As for repeat buyers that purchased the same size home, in 2003 the share of this group was only 16 percent—the lowest in the time series. From 2004 to 2012, the share of buyers purchasing the same size of home is greater each year than the share of those who traded down. In 2013 and 2015, repeat buyers that traded down surpassed those buying a home similar in size.

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In terms of home price, there has been a steady increase in home buyers trading down since 2008 when we started collecting the data. In 2008, just 22 percent traded down in price and 54 percent trade up. By 2015, buyers trading down in price increased to 30 percent and buyers trading up decreased to 47 percent. The share of repeat home buyers that bought roughly the same price in home has been steady at 23 to 25 percent from 2008 to 2015, with the exception of 2010 when only 20 percent bought at the same price.

To follow this series as we discuss the findings of 35 years of profile data, check out the hashtag #NARHBSat35 on your social channels. NAR Research will be releasing trend line data since 1981 to celebrate 35 years of home buyer and seller demographic research.

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