Homebuyers were forced to make more money as mortgage rates rose along with home prices, according to the National Association of Realtors’ 2023 Profile of Home Buyers and Sellers.
- The median household income for home buyers jumped to $107,000 in 2023, up from $88,000 last year and just the second time the number crossed into six figures.
First Timer. First-time buyers made up 32%, up from last year’s 26% but still well below the 38% average over the last 42 years.
- 60% of first-time buyers said the primary reason for purchasing a home was the desire to own a home of their own. This number fell to 26% for overall buyers.
What Matters. 60% of homebuyers cited quality of the neighborhood as the most important factor determining the location. Convenience to friends and family and overall affordability of homes were cited at 45% and 39%, respectively.
- The median distance between the home that recent buyers purchased and the home they moved from was 20 miles, down from 50 miles last year but is a reversion back towards the previously held norm of 15 miles.
More Financing & More Money Down. Eighty percent of buyers financed their home purchase, up slightly from 78% last year but still down from 87% two years ago.
- The typical down payment for first-time buyers was 8%, which is the highest since 1997. The typical down payment for repeat buyers was 19%, the highest since 2005.
Analysis. Jessica Lautz, NAR deputy chief economist, noted that cash/wealth are still king. “In a still-competitive housing market, more well-off home buyers were able to have their bids accepted by offering larger down payments and even by paying cash.”