There are many things a homebuyer considers when looking through the stock of available residences. New or used? Single family or condo? Near or far?
Helping us sift through those options is NAR’s 2016 Profile of Home Buyers and Sellers, which has provided an integral perspective on the things buyers value most. Below, we have spotlighted seven key details from the profile:
1. The Price/Renovation Divide – The “new or used” debate stretches back decades, and NAR found that homebuyers in either corner have passionate arguments for their housing preference. Purchasers of new homes, for instance, were high on avoiding renovations or problems with plumbing/electricity (cited by 34 percent), along with the ability to choose and customize design features (30 percent). Less prominent reasons included energy efficiency (10 percent) and low existing-home inventory (10 percent).
But purchasers of previously owned homes had their own compelling reasons, including better price (32 percent), better overall value (28 percent) and more charm/character (19 percent).
2. The Reign of Single Family – Regardless of the housing market’s location, the single-family home was far and away the most common housing choice, as our chart below demonstrates:
| Type of Market | Single Family | Townhouse | Condo |
|---|---|---|---|
| All Buyers | 83% | 7% | 4% |
| Suburb | 86% | 7% | 4% |
| Small Town | 82% | 5% | 5% |
| City | 80% | 12% | 5% |
| Rural area | 81% | 1% | 2% |
3. Housing by Composition – Whether it be first-time buyers (82 percent), repeat buyers (84 percent) or buyers of new homes (82 percent), the single-family home is the preferred choice, but drilling down a bit deeper to the household composition level reveals some fascinating nuances. For instance, among single female and single male buyers, 74 percent opt for single-family detached homes. Only 1 percent of married couples buy condos in large multifamily buildings. And 12 percent of single females buy townhouses.
Our chart breaks things down in more detail:
| Housing Type | Married Couple | Single Female | Single Male | Unmarried Couple |
|---|---|---|---|---|
| Single Family | 87% | 74% | 74% | 85% |
| Townhouse | 5% | 12% | 9% | 7% |
| Condo in Large Building | 1% | 2% | 5% | 1% |
| Condo in Small Building | 2% | 6% | 3% | 1% |
4. A Suburban Majority – Fifty-four percent of all homebuyers went with homes in the suburbs, with 19 percent going for small towns, 14 percent for urban areas and 11 percent for rural areas. Interestingly, the majority of first-time buyers did not purchase in the suburbs – only 49 percent bought homes there. Instead, 19 percent bought in small towns, 20 percent in cities and 12 percent in rural areas.
5. A Neighborhood of Choice – When it comes to the factors influencing a buyers’ neighborhood choice, overall quality came out on top, with 60 percent of all buyers citing that reason. Other notable reasons included convenience to work (43 percent), affordability (40 percent), convenience to family/friends (37 percent) and the quality of schools (26 percent).
Unsurprisingly, different locations brought out different preferences. While commuting and convenience to entertainment were much more important for city homebuyers, schools were more important to suburban buyers, while lot size was a big concern for small town/rural buyers.
6. Paying for Quality – We mentioned earlier that buyers of new homes cited the lack of renovations as the No. 1 reason for their purchase, but NAR’s profile makes clear that homebuyers should expect to pay a pretty penny for that quality. Not only is the median price of new homes ($294,000) much higher than that of existing homes ($217,000), but they also have a much higher share among more expensive price points – 25 percent of new homes sold for at least $400,000, compared to 17 percent of existing homes.
7. Commuting Concerns – As travel expenses and congestion intensify, commuting only grows as a homebuyer concern. A full 68 percent of buyers stated that commuting costs were important to them, with 29 percent stating they were “very important.”