Demographic Profile: Who Is the First Time Home Buyer?

The economy is coming back, mortgage rates are back on the rise, consumer confidence is climbing, home equity is increasing, and people are looking to move! These are all positive signs for the housing industry and those looking to sell their home. However, the home ownership rate has been decreasing year over year for the past few years, slowly but surely, so who exactly are these folks that are in search of a new home? Let's find out.

Home buyers fall under one of two categories: a first time home buyer or a repeat buyer.

The California Association of REALTORS outlines the demographic characteristics of the first-time home buyer in the following way: married female, average age of 31, and college educated with an average income over $100,000. The first time home buyer tends to be more computer savvy and is more likely to find their real estate agent online.

If you are a first time home buyer you generally fall into one of these living scenarios as well:  married with kids, single female, single male, unmarried couple, multi-generational housing or people who are downsizing.  This is how the National Association of Realtors profiles home buyers:

Married with kids:
Median household Income: $97,800
Type of home purchased: 91% Single Family
Median age: 37
Median square feet: 2,370
Buyer purchased home: 86% purchased with an agent
Reason to purchase: Larger home/Desire to own

Single Female:
Median household Income: $52,200
Type of home purchased: 65% Single Family
Median age: 48
Median square feet: 1,500
Buyer purchased home: 89% purchased with an agent
Reason to purchase: Desire to own

Single Male:
Median household Income: $66,500
Type of home purchased: 67% Single Family
Median age: 46
Median square feet: 1,600
Buyer purchased home: 88% purchased with an agent
Reason to purchase: Desire to own

Unmarried Couple:
Median household Income: $82,100
Type of home purchased: 79% Single Family
Median age: 32
Median square feet: 1,700
Buyer purchased home: 91% purchased with an agent
Reason to purchase: Desire to own

Multi-Generational Housing:
Median household Income: $85,800
Type of home purchased: 82% Single Family
Median age: 50
Median square feet: 2,150
Buyer purchased home: 87% purchased with an agent
Reason to purchase: Desire to own

Buyers who are downsizing:
Median household Income: $83,700
Type of home purchased: 73% Single Family
Median age: 60
Median square feet: 1,730
Buyer purchased home: 87% purchased with an agent
Reason to purchase: in need of a smaller home

The biggest struggle in buying a property as a first time home buyer is usually financing and qualifying so you make sure you are pre-qualified early in the home buying process!

On the opposite end of home buyers, California Association of REALTORS explains the repeat buyer tends to be very different. On average the repeat buyer is a single male, average age of 43, has a six figure income level and they are more likely to buy their home all cash than the first time home buyer is. The main reason for repeat buyers not purchasing is not the financing but the fact that they couldn't find the right house or decided to wait until the market provided new inventory.

I found the demographics of both the first time home buyer and the repeat buyer very interesting! A lot of my friends and peers fall into the first time home buyer category so I was intrigued to see the demographics really align to people I know who are in the process of buying their first home. So many of my friends look to sites like Trulia and Zillow which really is a testament to the computer savvy first time home buyer profile!

If you are a first time home buyer or a real estate agent looking to get your client in their very first home, check out our blog on loans for first time home buyers.