Times, they are a changin’
The National Association of Realtors have released data confirming what we all could probably guess, people with equity and secure income are more likely to buy homes.
However, the numbers are in, and it is a bigger difference than we thought.
Boomers making their comeback
The first bit of big news is that Baby Boomers, older Boomers in particular make up a larger proportion of home buyers than in the past. Folks aged 62 to 70 made up 14 percent of total home buyers in 2016, not to mention 21 percent of single female buyers.
That range is also more likely to prioritize personal use rather than investment in their real estate purchases:
19 percent cite retirement as their reason for purchase, with a further 19 percent motivated by the desire to live closer to family and friends.
Older buyers are also the most willing of any demographic to move long distances, at a median move distance of 25 miles, and are more likely to buy long-term, with 31 percent of buyers stating that they don’t plan on moving again and expect to live in their new home permanently.
That’s where things get interesting. Despite being the most active home buyers in the marketplace, the household income of buyers in the 62 to 70 range is meaningfully lower on average than the median income of buyers overall, $76,800 to the median $88,500.
Older Boomers offset short income with comparatively higher equity.
Over half (56 percent to be exact) of buyers use proceeds from the sale of a previous residence to fund their down payment, and 6 percent take funds from an IRA. They’re also the most likely demographic to have saved for a home for more than 2 years.
Bigger news, while older buyers are typically more conservative buyers, tougher and more demanding than the darn kids who won’t get off their lawns, older Boomers seem to be reversing that trend.
Boomers aged 62 to 70 aren’t just the most active home buyers in the marketplace, they’re the most likely to be happy with the purchase process.
Boomers reported a remarkable 91 percent satisfaction rate. They’re also the least likely to describe the paperwork as a difficult step, and most likely to state they made no compromises on their home purchase.
Bigger yet – older folks are looking to sell.
They’re the second most active home sellers in the marketplace, making up 21 percent of sellers overall. Boomers sell for the same sorts of reasons they buy: 21 percent because of retirement, and 26 percent to be closer to family and friends. As indicated by their buying patterns they also have the highest equity of any demographic at 36 percent, an average cash value of $60,000.
People are living longer, working longer and making money longer.
Sales and marketing tends to emphasize younger demographics, but it’s increasingly clear that those looking to buy and looking to sell should both be looking for the oldest folks in the room.