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Buying a home is a life goal that many people have. There are several great benefits of buying a home, and it offers a place where you can truly be yourself and have full control over all of the design and renovation decisions. But who is buying these homes?
Well, the demographic of people buying a home has changed a lot in the last few decades. The average buyer in 2020 is quite different from their counterpart in the year 2000. This article is going to look closer at just how much the demographics of first time home buyers has changed.
First, we’ll begin by looking at the demographics of homebuyers in the 2000s, and then compare them to what homebuyers looked like throughout the 2010s.
Home Buyer Demographics in 2000-2010
To do a fair comparison, we first need to look at the first time home buyer demographics in the 2000s. The median age for someone to buy their first home in the 2000s was around 31 years old. Well over half of the people who were buying their first homes were married couples, as well. Unmarried couples made up barely over 30% of the first time home buyer market.
Of course, people of all walks of life and races were buying homes, but the rates of homes being bought were not equal. Caucasians were responsible for just shy of 70% of the first time home buyers throughout the 2000s. During most of this period, the next closest race in terms of the share of first-time homebuyers was Hispanics, with barely over 10%.
Also, home prices were relatively low in much of the USA, and this allowed those with a more modest income to purchase a home and not struggle financially. Mortgage rates through most of the decade were also incredibly low, which saw homeownership rates get quite high during the 2000s. As you likely know, this eventually led to the housing market crash that caused thousands to lose their homes. The eventual housing bubble bursting unfortunately had a long-lasting effect on the American housing market that is still felt in some areas.
Home Buyer Demographics in 2011-2020
Now, let’s look at how those demographics have changed in recent years. First of all, the median age of a first time home buyer didn’t change by much, as it remains just over 30. But when you look at the median age of all buyers, the median buyer is now much older than they were in the 2000s. Back then it was around 39 or 40 years old, and now it is in the mid-40s or older.
While the age of first-time buyers is fairly steady, that doesn’t mean there are many changes to who first time home buyers were in the 2010s. During the decade, single women are buying homes at an increasing rate, as are Hispanics, African-Americans, and Asian-Americans. Many unmarried couples are also buying homes at a greater number than in the past, up to nearly 40%.
This is a far cry from the early 2000s, where most people buying their first home were a married couple. Also, many more people are purchasing homes for multi-generational use, where grandparents or parents might be living in the same home. As you can see, the demographics of homeownership are much more diverse than they were during the 2000s.
The homeownership rate in the 2010s was also much lower than in the previous decade, by around 5% on average. This could be for several reasons, such as many people having expensive student loans or house prices simply being too high. The rising costs of living and the housing market still being in recovery could also be reasons. People need to make much more than they did in the previous decade to afford a home comfortably.