Today’s Home Buyer
Whether you are thinking about selling your home or buying a new home it is important to know what is trending with home buyers across the country. From Millennials to Baby Boomers, to repeat buyers, each type of home buyer is looking for something in particular and has a specific way of finding that information. Below you will see an outline of a few key characteristics of current home buyers.
The Zillow Group Report defined home buyers as people who moved into a home that was purchased within the last year (2015-16), which includes the main decision-makers and household members who had a say in the decision.
•Half of all buyers are under the age of 36, meaning the Millennial generation is driving more of the housing market than we previously understood.
•Buyers aren’t replacing the expertise of real estate agents with online research—but they are doing a tremendous amount of research online before contacting an agent. Those who start their home searches online are actually more likely to use an agent than other buyers.
The typical home buyer
•Mid-to-late 30s or early 40s
•Married (67 %)
•College-educated (75 %)
•On the hunt for a single-family home (83 %)
•Median annual household income of $87,500
Nearly half are buying for the first time
First-time buyers, a group that makes up almost half (47 %) of the buying market, have a median age of 33 and nearly 6 in 10 are Millennials (56 %). They spend a median of $200,000 on a home.
Repeat buyers are older, with a median age of 42. They have a preference for single-family homes over other home types, and pay an average of 18 % more than first-timers for their home ($235,000 median price). Repeat buyers are slightly less decisive about location, with almost one in five (18 %) purchasing a home in an area that is outside their initial search criteria, compared to just 14 % of first-time buyers.
Typical home search takes about four months
Buyers spend 4.2 months on average shopping for a home. The Silent Generation has the fastest search time frame—spending an average of 3.8 months, followed by Millennials, who typically shop for four months. Baby Boomers spend 18 % more time than Millennials on their home search, averaging 4.9 months searching for a home to buy.
Most buyers desire a single-family house | A freestanding, single-family house is buyers’ top choice, with 83 % of all buyers seeking this home type. Buyers also consider townhouses (20 %), condominiums or co-op dwellings (13 %), duplex or triplex buildings (9 %). 15% of buyers sought raw land or an empty lot.
Brand-new homes a popular consideration | Nearly half (48 %) of all buyers consider homes that have never been lived in before. Younger buyers (50 % of Millennials and 54 % of Generation X) are significantly more likely than Baby Boomers or the Silent Generation (38 % and 39 %, respectively) to consider newly built properties. Additional cohorts showing a greater desire for brand-new homes include men (51 % versus 44 % of women), families with kids (55 % versus 42 % of households without kids), and those earning more than $75,000.
Among buyers who were interested in and ultimately purchased brand-new homes, the following information is most desired during their search:
•Energy-efficiency savings (48%)
•Builder reviews/ratings (47%)
•Options for customizing the home (45%)
•Inventory of a community, including when a lot becomes available (44%)
Online resources and agents top the list of searching and shopping resources
The majority of buyers rely on both online resources and guidance from a real estate agent during their home search. 87% of buyers use online resources and 75% select a real estate agent or broker to work with, suggesting that most buyers combine self-directed research using websites and apps with the market expertise and human touch offered by a real estate professional. In fact, buyers who utilize online resources during their home search are significantly more likely to also use an agent.
Additional resources utilized by buyers during their home search include for sale and open house signs (64% of buyers) as well as referrals from friends and family (51%). Print ads (39%) and direct mail (26%) are the least used resources.
Buyers use multiple devices to access online resources | Buyers using online resources during their home search are accessing them from a variety of devices, most often desktop computers (77%), followed by mobile websites (56%) and mobile apps (48%). Utilizing mobile devices to search for homes is most prevalent among buyers under the age of 50, with 66% of Millennial buyers and 62% of Generation X buyers accessing via mobile.
In addition to searching online and using agents, Millennials rely on their personal networks. They’re the generation most likely to turn to a friend, neighbor, or relative to inform their home search. They’re also more likely than older generations to visit a builder’s sales center and slightly more likely to consider direct mail a resource.
Cole Residential utilizes many online resources to ensure our listings are being seen by current home buyers.
Use of agents varies by generation | The older the buyer, the more likely that buyer is using an agent. Baby Boomers and the Silent Generation rely most heavily on an agent or broker for real estate guidance, with 83% and 81% respectively citing them as a resource in their home search. 74% of Generation X buyers report using an agent, followed by 70% of Millennials.
Half of buyers enlist an agent at the start | Just over half (51%) of buyers who use an agent involve them at the very beginning of their home search. 41% get started on their own, choosing to enlist an agent before they make an offer. This includes 27% who involve an agent after they have been searching for a while but before they tour any homes. Baby Boomers are more likely than other generations to begin touring homes independently before selecting an agent, with 19% of this generation doing so.
How do buyers find an agent
The average number of agents buyers consider hiring is 2.2. Slightly more than half (53%) of buyers using an agent considered multiple agents. While 33% of buyers find an agent via referrals, nearly that many—26%—are finding an agent online. Only 3% of buyers find their agent through newspaper ads, and 2% find them through direct mail such as postcards or newsletters.
Millennial and Generation X buyers are more likely to find their agent online, with 29% and 27% respectively finding an agent through this resource. Just 20% of Baby Boomer and 17% of Silent Generation buyers use the internet to find their agent.
Buyers expect fast response to initial inquiry | The older the buyer, the faster they expect an agent to respond to their initial inquiry. Over half of Silent Generation buyers (52%) expect agents to get back to them within a few hours. Among all buyers, 78 % expect a response within one day. Only 22% consider it acceptable for an agent to take two or more days to respond.
Local market knowledge and a positive first impression are key | Buyers scrutinize prospective agents in multiple ways, including:
•Evaluating an agent’s local market knowledge (60%)
•Reviewing brokerage websites (58%)
•Asking friends and family about experiences with an agent (56%)
•Reading online agent reviews (50%)
•Reviewing agents’ sales histories (46%)
•Interviewing agents (44%)
Millennials are particularly likely to evaluate an agent online, including reading online reviews (61%) and delving into past sales data (57%).
At Cole Residential, we pride ourselves on our commitment to our buyers and sellers.
How buyers evaluate an agent
First-time buyers in particular devote considerable effort evaluating potential agents. These buyers are much more likely to read online reviews (62%), check an agent’s sales history (56%), and ask friends and family about an agent (61%).
Ultimately, buyers’ first impressions and confidence in an agent’s local market knowledge are the most important factors in their decision to hire a particular agent. More than 80% of buyers chose these traits as top determining factors in choosing an agent, viewing them as more important than an agent’s recent sales results, a personal referral, or being a part of a recognizable brokerage.
Regarding first impressions, buyers prioritized both trustworthiness and responsiveness as traits they’re looking for when first meeting an agent. Women in particular value these two traits as top criteria when selecting an agent.
Preferred communication is via phone call | When it comes to regular communication with an agent, one-third of all buyers prefer phone calls, while in-person meetings appeal to just over a quarter of buyers (27%). Baby Boomer buyers (25%) show the highest preference for email interaction, while Millennial and Generation X buyers are slightly more amenable to texting.
Home tours rank as top service | The top service buyers want from their agents is private home tours (67%). They’re also depending on agents for notifications about new homes on the market (58%) and pre-screening homes (44%). Additionally, buyers ask agents for referrals to home inspectors and mortgage lenders, and even to provide listings that fall outside their expressed buying criteria.
First-time buyers prefer seeing homes in person (62%) to having them previewed by an agent (40%), and are more interested in inspector referrals and seeing listings outside their initial search criteria. Repeat buyers are more receptive to agents previewing homes for them (47%) but still appreciate in-person tours (72%).