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First-time buyers made up only 26% of buyers in the 2022 profile of home buyers and sellers report from the National Association of REALTORS®. That marks the lowest share since the data collection reports began in 1981 and was down from the 2021 figure of 34%.
The 2022 report reflected responses of buyers who purchased a primary residence between July 2021 and June 2022.
The annual survey examines demographics of home buyers, characteristics of homes purchased, the home search process, and financing methods. Survey respondents also answered questions about their experiences with real estate professionals.
The 2022 report included several “firsts” or “all-time highs:”
- 27% of first-time buyers moved directly from a family member’s home into homeownership, an all-time high.
- The age of first-time buyers averaged 36 years (an all-time high), up from 33 years.
- Unmarried couples accounted for 10% of buyers, the highest share ever recorded. (Among first-time buyers, 18% were unmarried couples and 5% were other household compositions – also the highest shares in the report’s history.)
- The median distance between where a buyer lived when they purchased and where they purchased surged significantly to 50 miles, whereas from 2018-2021 it was only around 15 miles. Analysts attribute the increase to affordability, the ability to work remotely, and migration to small towns and rural areas.
- For the first time, cryptocurrency showed up as a form of financing. Two percent of first-time buyers said they sold cryptocurrency to help with their down payment.
- The final sales price of recently sold homes was a median of 100% of the final listing price – the highest ratio since 2002.
- More than six of every 10 buyers were married couples, with single females accounting for 17% of buyers. Nine percent of buyers were single males.
Of homes purchased during the survey timeframe, 12% were new homes, with 88% being previously owned.
By a wide margin, detached single-family homes were the most common housing type, favored by 79% of the buyers.
Nearly all buyers (96%) used online tools in their search process, with 60% using mobile devices and about a third (34%) using a desktop or laptop. Nearly half (47%) started their home buying process by looking online. About one of every five buyers (18%) initiated their process by contacting a real estate agent.
When asked to rate factors that influenced their choices, six of every 10 buyers cited quality of the neighborhood as most important. Scoring equally well, at 37%, were convenience to friends and family and overall affordability of homes.
When queried about financing, more than a quarter of buyers (26%) said saving for a down payment was the most difficult step in the process. More the three of every four buyers (78%) financed their purchase, down from the year prior when 87% financed their purchase.
The typical down payment amount for first-time buyers was 6%; for repeat buyers, it was 17%. Buyers used funds from multiple sources to make their down payment, with savings being the primary source. Other sources included gifts or loans from family and friends, the sale of stocks/bonds, and a loan from their retirement fund.
Noting the report covered a period when the housing market shifted from a frenzied, low-interest rate, low inventory environment characterized by bidding wars to a higher interest rate but still low inventory environment, researchers reported buyers typically purchased their homes for 100% of the asking price. More than a quarter of buyers (28%) paid above asking price. Notably, inventory during the timeframe covered by the 2022 report was at the lowest level since 1999.
Nearly nine of every 10 buyers (88%) consider the purchase of a home to be a good investment. A similar number (89%) said they would use their agent again or recommend their agent to others.
The largest share of buyers, at 88%, were white/Caucasian, followed by Hispanic/Latino, at 8%. Both groups grew from the previous report. Only 3% of buyers were Black/African-American. Asian/Pacific Islanders made up only 2% of buyers.
The research also examined the For Sale by Owner (FSBO) segment. About 10% of the transactions were FSBO, up from the year prior when it was 7%. Half those owners said they knew the buyer of their home. The median price for by-owner sales was $225,000, which compares to a median price of $345,000 for homes sold with agent assistance.
Methodology
The 2022 survey contained 129 questions, about twice as many as the initial survey in 1981, which had 59 questions. Only buyers of primary residences were included in the survey. Investors and buyers of vacation homes were excluded. Respondents had the option of completing the survey online or via a hard copy. The online survey was available in English and Spanish.
The final report encompasses 142 pages with many charts that span the 41-year history of the data set. It is available for purchase via digital download. A free 10-page synopsis is also offered by NAR.