Each year, the National Association of Realtors publishes their Profile of Home Buyers and Sellers for the previous year. It’s a pretty detailed survey that results in more than 100 pages in the book. The non-member price for this report is $150, but it could be a wise expenditure for some investors, or you may be able to borrow a copy from a Realtor, as they pay a lot less, especially for a downloadable version.
The article begins with article references from the previous couple of years that mention the “trend” toward single buyers, both unmarried and divorced, particularly divorced women. This particular trend statement is addressed by one data point in the survey, which says that two years ago 32% of home buyers described themselves as single. This dropped over two years to 25% at the time of the survey.
This drop is partly attributed to the tough mortgage market, particularly rough on single and first time buyers in their attempts to qualify for a loan. Married couples increasingly have two incomes and are usually more able to get that mortgage loan. In the survey, Sellers and their goals are related to the Buyers and the changing market trends. The average seller is older and has been in their home for an average of nine years. They’re pulling less equity out than in better years.
They typical home sold in 11 weeks on the market this year. Sellers who have owned their homes for shorter periods, say four to five years, reported a median loss on the sale of $16,000, while those in the home longer reported a median gain of $20,000, far less than in the past. Buyers are getting good deals, when they can qualify for a mortgage. Fewer single individuals are buying while they try to build on their credit scores, income and amount they have available for down payments.
Investors can probably rely for a few more years on a fresh supply of renters who in the past would have been first time home buyers. It’s still a good time to invest in rental property, as prices will rise again, and if rents later drop, there’s a profitable sale possibility.