The composition of the housing markets is changing, as are some key housing demographics, according to the latest edition of the National Association of Realtors' annual profile of buyers and sellers.
Released at NAR's annual convention in Anaheim, Calif., last month, the survey found that just 36% of buyers in the 12-month period between July 2010 and June 2011 were first-timers, a sharp decline from a record 50% in the last survey.
First-time buyers are key to the housing recovery because they help existing owners sell and trade up.
Last year, first-timers accounted for half of all existing home sales in part because of the now-expired federal homebuyers' tax credit. But long-term averages show that four out of 10 buyers are typically rookies, said Paul Bishop, NAR's vice president of research. So the decline is considered significant.
The study, which is based on 5,700 responses to a survey mailed to a list of homebuyers supplied to NAR by credit repository Experian, also found that the median age of all buyers has jumped from 39 to 45 years. The median age of first-timers is 31, but the median age of repeat buyers is now 53.
Buyers typically aren't taking any longer to make up their minds which houses to purchase, but they are looking are more properties. They also are spending two weeks looking around—mostly on the Internet—before they contact a sales professional.
More than half considered a foreclosure, but most eventually ruled out a distressed property because the process was too long or too difficult, or the house in question was in poor condition.
Seventeen percent of recent buyers reported they had no difficulty going through the process, and half said the hardest part was finding a home. But 22% had trouble with the paperwork and 17% had difficulty understanding the sales process and the steps involved.
The latest profile features a full section on financing. The principle finding: four in 10 said the mortgage application and approval process was harder than expected. That's about the same share as in the last survey, but far greater than in 2008 and 2009, when less than a third found the process more difficult than expected.
To illustrate the impact tighter lending requirements are having on the market Bishop pointed out that the downpayment made by both first-time buyers as well as those moving up was a full percentage point higher than in the 2010 study.
Also, while the median price paid by both groups was higher, the incomes were even greater, 11% greater for repeaters.
Overall, nearly nine out of every 10 buyers financed their homes (investors were specifically omitted from the study) but 94% of those 18 to 24 and 96% of those 25 to 44 relied on mortgages.
As always, savings was the largest source of money for a downpayment, even among rookie buyers. But gifts from family and friends remain another key fountain of funds.
Conventional mortgages are the dominant type of loan among repeat buyers, but first-timers tend to favor government-insured loans.
