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It hasn’t been easy to be a home buyer over the past year, particularly for first timers who’ve faced elevated home prices, higher mortgage rates and slim inventory options. (Although, inventory has been improving lately). Home sellers, on the other hand, have had an easier time, continuing to leverage record equity to purchase their next home—often in cash.
“The U.S. housing market is split into two groups: first-time buyers struggling to enter the market and current homeowners buying with cash,” says Jessica Lautz, deputy chief economist and vice president of research at the National Association of REALTORS®. “First-time buyers face high home prices, high mortgage interest rates and limited inventory, making them a decade older with significantly higher incomes than previous generations of buyers. Meanwhile, current homeowners can more easily make housing trades using built-up housing equity for cash purchases or large down payments on dream homes.”
Here are a few takeaways from the NAR’s newly released 2024 Profile of Home Buyers and Sellers, a consumer survey that reflects completed transactions between July 2023 and June 2024.
First-time buyers are retreating from the market. The share of first-time buyers has fallen to a historic low of 24%, according to NAR. Prior to 2008, first-time buyers comprised 40% of the market. First-time buyers, who do not have proceeds from another home sale to leverage, are finding it takes a lot more money to enter today’s housing market. Nearly half say high rent is hampering their ability to save for a down payment, followed by student loans and credit card debt. Those who can afford homeownership tend to be older than in the past: The median age of first-time buyers this year reached an all-time high of 38 years old (compared to those in their late 20s in the 1980s). They’re also coming up with higher down payments than in years past—a median of 9% (the highest recorded since 1997). What’s more, first-time buyers are increasingly relying on others to help them buy: 25% used a gift or loan from a relative or friend for their home purchase.
Cash buyers have surged to a record high. More than a quarter—26%—of home buyers over the past year paid cash for their home purchase—an all-time high, according to NAR’s data. This enables these buyers to bypass a mortgage at a time when interest rates on loans rose above 7% a year ago. Thirty-one percent of repeat home buyers were able to pay cash for their home purchase. “This is likely due to the increase in housing equity,” NAR’s report notes.
Home sellers aim high—and it pays off. Sellers over the past year typically sold their property at 100% of their asking price—the highest recorded list-to-sale median since 2002, NAR notes. About 27% of sellers were even able to nab more than their list price. Home sellers also tended to sell their homes quickly, typically within three weeks. Due to high buyer demand and lack of housing inventory, 76% of home sellers didn’t offer a sales incentive; only 24% of sellers offered one (like covering the buyer’s closing costs or offering a home warranty policy), dropping from 33% the year prior.
Multigenerational living gains traction. Multigenerational buyers climbed to an all-time high of 17% over the past year (up from 14% the previous year). Home buyers cited cost savings, elder care and accommodating young adults moving back home as reasons for purchasing a multigenerational home. “As home buyers encounter an unaffordable housing market, many are choosing to double up as families,” Lautz says. “Cost savings are a major factor, with young adults returning home—or never leaving—due to prohibitive rental and home prices. Meanwhile, elderly parents and relatives are moving in with family members as home buyers reprioritize what matters most to them.”
FSBOs drop to an all-time low. For sale by owners comprised just 6% of home sales, a record low, according to NAR. Meanwhile, 90% of home sellers sold their home with the assistance of a real estate agent, citing benefits like being able to market their home to a wider pool of buyers and pricing the home more competitively. FSBOs typically sold their home for less—a median of $380,000 versus $435,000 for agent-assisted sold homes. “Most home buyers and sellers find it valuable to use an agent who is a REALTOR® to help them maneuver through the complicated home buying and selling processes, especially in a challenging housing market,” says NAR President Kevin Sears.
Buyers dig deeper for higher down payments. In 2024, the median down payment among all buyers was 18%, the highest figure in more than 20 years. Broken out, first-time buyers made a median 9% down payment (their highest percentage since 1997), and repeat buyers’ down payments typically were 23% (their highest since 2003).
Single women remain active in the housing market. Households with a single income and no kids—known as SINK buyers—have emerged as a homebuying force. Many SINKs are single females, who made up 20% of home sales over the past year while the share of single males fell to 8%. Meanwhile, the number of home buyers with children under the age of 18 is shrinking: 73% of recent home buyers did not have a child under the age of 18 in their home, the highest share on record, according to NAR’s data.
Newly built homes gain greater buyer attention. New home purchases accounted for 15% of home sales over the past year, the highest share in about 17 years. New-home buyers say they were drawn to new construction because they wanted to avoid renovations or problems with systems, like plumbing or electricity, and they wanted to customize their home’s design features.
Real estate agents remain a top information source. While buyers turned to the internet to help guide their home search, they rated real estate agents as the most useful information source. Eighty-six percent of buyers and 90% of sellers used a real estate agent in their transaction. The NAR consumer survey reveals the top qualities that sellers and buyers say they were looking for from an agent during the sales process.
What Sellers Want
- Marketing the home to buyers: 22%
- Pricing the home competitively: 20%
- Selling the home within their specific timeframe: 18%
- Identifying ways to increase resale price: 15%
- Finding a buyer for the home: 13%
What Buyers Want
- Point out unnoticed features/faults with a property: 55%
- Help to understand the process: 53%
- Negotiate better sales contract terms: 44%
- Provide a list of service providers (e.g. home inspector): 43%
- Improve knowledge of home search areas: 41%
