Every year, The NATIONAL ASSOCIATION OF REALTORS® releases the Profile of Home Buyers and Sellers report, an annual survey of recent home buyers and sellers who recently completed a transaction. This year is the report’s 40th anniversary and also uniquely includes an entire year of data in which buyers and sellers purchased or sold during the COVID-19 pandemic. Moreover, home buyers entered a housing market with historically low housing inventory and historically high year-over-year home price gains. Despite the competition in the marketplace and multiple unprecedented challenges, buyers continue to begin the home search process and purchase homes. The information provided by this report supplies an understanding of consumer-level trends. This survey covers information on demographics, housing characteristics, and the experience of consumers in the housing market, as well as for those who are not yet able to enter the market. Buyers and sellers also provide valuable information on the role that real estate professionals play in home sales transactions.
Matt Christopherson, Research Analyst, and Sidnee Holmes, Research Assistant, were two of the lead authors of the report. In this conversational Q&A, they provide perspectives on how to use the report, insights into the data and the results they found to be most interesting.
To begin, what is the Profile of Home Buyers and Sellers – what kind of data can we find in this report?
Matt Christopherson: This flagship report provides a full array of data related to the home buying and selling process. From home buyer and seller demographics and preferences, to how they searched for homes and financed the purchase, to what they look for in real estate agents, this report is an invaluable resource to many.
Sidnee Holmes: The NATIONAL ASSOCIATION OF REALTORS® Profile of Home Buyers and Sellers is an annual survey of recent home buyers and sellers who executed a transaction within the last year, conducted from July 2019 to June 2020.
This is one of NAR Research’s longest-running reports. When did it start?
Matt Christopherson: The report began in 1981, so this is the 40th edition of the report. With this, we have included many new time series of various data points to easily view trends and changes over time. It’s amazing to see how much has changed over the past ten years, much less the past 40. Some stark contrasts of the past 10 years can be found in our 10-year challenge.
Sidnee Holmes: For nearly four decades, the Profile of Home Buyers and Sellers research has been the industry’s most reliable source of information into consumer behavior. It has expanded and changed in response to shifting home buying trends and the increasing demand for additional information. NAR conducted the study for the first time in 1981, with only 59 questions. The 2020 survey included 131 questions.
What are some key differences between the early versions of the report and the latest version?
Matt Christopherson: There are seemingly endless differences from when this report began. A few examples lay in the tools home buyers use in their search; 95% of buyers used the internet in their search this year, and the internet didn’t even exist yet in the beginnings of the report. In addition, we see differences in financing of purchases: different economic conditions, rising student loan debt and home prices, and even pandemics have drastically affected home financing.
In contrast, some things don’t change, like the need for and satisfaction in the use of REALTORS® in both buying and selling homes. This past year, 87% of buyers and 90% of sellers used a real estate agent to complete the transaction.
Sidnee Holmes: The report has evolved over the years. Data has been collected for more than three decades describing the demographic characteristics of home buyers and sellers, the experience of buyers and sellers during the home transaction process, and market characteristics such as the use of real estate agents. The way data is acquired is one indicator of how the market has changed. In 1981, the survey was available only in hard copy. Recent home buyers can now complete the survey in English or Spanish, on paper or online.
What important trend(s) stood out to you in the latest report?
Matt Christopherson: This year, we had one of the hottest and most competitive years in residential real estate. Given the competitive landscape, we saw buyers move quicker than ever, searching for just eight weeks and viewing only eight homes before purchasing and their typical tenure in their previous home dropping from ten to eight years. With this, sellers had their pick of multiple offers and typically sold their homes in just one week and at full asking price.
Sidnee Holmes: Buyers typically purchased their homes for 100% of the asking price, with 29% purchasing for more than the asking price. Only 26% of all sellers offered incentives to attract buyers, a drop from 46% of all sellers last year.
What aspects of this report do you find most interesting?
Matt Christopherson: A few of the most interesting aspects of the report are the tools that buyers use in their search as well as changing demographics and how those shape different experiences. We continue to see an increase in single female buyers, despite the fact that they typically earn less income and are more likely to be supporting a child in their household.
Sidnee Holmes: I always look forward to the number of Homebuyers that purchase multigenerational homes.
How can our members use this data?
Matt Christopherson: Members can use this report as their go-to resource for data and trends related to the home buying and selling experience. They can keep a pulse on demographics and household characteristics, home prices and sizes, and regional and age group differences. REALTORS® can use data on search tools to tailor their marketing of current listings and use info on what buyers look for in an agent and communication preferences in their business plans for generating new business.
Sidnee Holmes: This report provides insight into specific buying and selling activity for industry experts.