The typical U.S. homebuyer now needs more cash to buy a home, plus a six-figure income, according to a new report released Monday by the National Association of Realtors. It is said that
Median household income for homebuyers rose 22% in June from $88,000 at the same time in 2022, according to the latest data tracked by the National Association of Realtors (NAR) since 1981. The total amount was $107,000.
“When factoring in the decline in housing affordability due to rising home prices and mortgage rates, household incomes for households that successfully purchased a home jumped nearly $20,000, topping six figures for the second time on record.” said Jessica Lautz, NAR Deputy Chief Economist. Vice President of Research. “In a still competitive housing market, wealthier homebuyers were able to offer higher down payments and even pay cash to get their bids accepted.”
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The buyer certainly needed more cash to make the deal. The typical down payment for U.S. buyers was 19% of the purchase price in June, the highest since 2005, according to the report. Down payments for first-time buyers are typically 8%, the highest since 1997.
The number of first-time buyers rose to 32% of all homebuyers, up from a record low of 26% last year, the report said. However, this number is still below his historical average since 1981 of 38%. Additionally, the average age of first-time home buyers has fallen from an all-time high of 36 to 35, and the age of repeat buyers has dropped from 59. The number reached a record high of 58 people.
“First-time buyers have tiptoed back into the market this year with less competition and fewer multiple-offer scenarios,” Lautz said. “While the proportion of first-time buyers is still near historic lows, it is higher than last year. In particular, today's first-time buyers have household incomes nearly $25,000 higher than last year and are using their financial assets to is likely to enter the market.”
Homebuyers are also becoming more diverse, according to the report, which is based on a survey of primarily residential homebuyers. The percentage of white buyers fell from 88% to 81%, and 7% identified as Hispanic. 7% as black. and 6% for Asian/Pacific Islander people. Additionally, 10% of buyers were born outside the United States, up from 8% last year, and 6% spoke a first language other than English, up from 5% last year.
“Homebuyers last year were more racially and ethnically diverse, with increases among minority buyers, buyers born outside the United States, and buyers whose primary language is not English. ,” Lautz said. “This is an encouraging sign that homeownership rates may contract in the future as more minority buyers enter the market.”
