Homebuyer demographics are changing. Today's first-time homeowner's median age is 33 — the highest ever since the National Association of Realtors began tracking in 1981. First-time buyers are roughly a third of all homebuyers, according to this report. The trend has implications for real estate brokers, agents and investors, who are a significant part of the buying process for all generations.
Mortgage rates are low, and many renters will be deciding to invest in real estate in the months ahead. The first-time homebuyer has access to a variety of financing options, and smart, tech-savvy shoppers do their online research to determine what they can afford before starting a search.
Savvy real estate professionals need to not only stay on top of buying trends and neighborhood data but also keep in touch with the features that today's first-time homeowner is looking for in a new dwelling and community.
Locations and Features That Appeal to First-Time Homeowners
Timeless and High-Potential Neighborhoods
Although the quality of schools and proximity of activities and services are evergreen selling features, up-and-coming neighborhoods present great opportunities for new homeowners who may be willing to wait until an area "turns."
The work-from-home (WFH) trend, precipitated by the COVID-19 pandemic (as many people choose to leave crowded cities), is changing buyer behavior. This phenomenon creates opportunities for sales in areas that may have been less popular a couple of years ago. Although younger buyers may still gravitate to areas where the jobs are, choosing a home location based solely on office proximity may soon become a dated concept.
The pandemic has also had an impact on the types of features sought by first-time homebuyers.
Room for growing families may still be a priority for younger couples. Yet, the kitchen has become more critical than ever, according to Alex High of High Realty Group in San Diego. He notes that people today are spending more time preparing meals.
Simon Black, a Realtor who has worked in both New York and San Francisco's Bay Area, notes that home offices and "Zoom rooms" have recently become very popular, as many new buyers are now both working and playing in their houses.
Sustainability is crucial to today's young buyers. Features such as LEED-compliant lighting, non-toxic paint, and appliances that conserve energy are among the "must-haves" for the new 2020 homebuyer.
The National Association of Homebuilders details some of the most popular features for the first-time homeowner. Among them are:
- A home that is detached (77% of buyers)
- Modest but open space (median size of about 2,000 square feet)
- A suburban rather than urban location
Brokers also note that home gyms, charging stations and touch-free fixtures are trendy, and pet-friendly features are crucial to many new homeowners. Dog-friendly yards and pet-centric communities are as important to many young buyers today as human-related factors.
Knowing Your Market Is More Important Than Ever
The great news is that more than 90% of the younger market still relies on brokers and agents in their homebuying journey. Although they may start their searches online, they rely on a trusted professional to help them make decisions and ensure deals go smoothly.
Building trust involves knowing what your buyers — of all ages — are looking for and presenting them with comprehensive, reliable and timely data to aid in their decision-making. Buying that first home is a substantial financial and emotional decision for anyone, and building the right relationship with a first-time homebuyer can help you secure future sales and referrals for years to come.