Realtors are seeing more multi-generational homebuyers and they attribute this trend to economic and tight mortgage credit conditions that continue to haunt the housing market.
In a survey of successful homebuyers, the National Association of Realtors found that 14% of respondents were multi-generational households where adult children, parents and/or grandparents pooled their resources to purchase a home. It marks the first time NAR has posed this question in its annual survey.
“We don’t have historic comparisons for this finding, but added the question to this year’s study because we’ve been hearing more about this trend,” according to NAR chief economist Lawrence Yun. “It’s another manifestation of the difficulty in obtaining a mortgage, in addition to slow growth in good-paying jobs,” he says.
The NAR survey does not tell how many of these multi-generational buyers obtained a mortgage. However, nearly nine of ten buyers in the survey financed their purchase over 12 months ending in June 2013. So a good percentage of multi-generational homebuyers must have obtained mortgage financing.
The Realtors also highlighted the decline in single-buyer transactions as another sign of continuing tight credit conditions.
“Single homebuyers have been suppressed for the past three years by restrictive mortgage lending standards, which favor dual-income households who are more likely to have higher credit scores,” Yun said.
The market share of single buyers was 32% back in 2010 compared to 25% in 2012 and 2013.
NAR does not include investors in its annual “Profile of Home Buyers and Sellers” because they are not owner-occupants. “The housing recovery would have been much weaker without investors, who often purchase with cash,” Yun said.
“Ninety-five percent of entry-level buyers chose a fixed-rate mortgage, four out of ten financed with a low-downpayment FHA mortgage, and 8% used the VA loan program with no downpayment requirements,” NAR said.
