Whether it’s to start a family, relocate closer to work or simply putting down roots for the future, Americans have various reasons for homeownership. But for retirees, the biggest factor driving their home buying decisions is retirement, according to a recent national survey.
The purchasing of senior-related housing increased 14% in 2015 over the last year, with buyers typically buying detached single-family homes, says the 2015 Profile of Home Buyers and Sellers survey from the National Association of Realtors (NAR).
The 2015 report is based on 6,406 survey responses NAR gathered in July from primary home buyers who purchased a residence in the 12-month period between July 2014 and June 2015. It covers behaviors from a range of home buyers, including first-time buyers, single and married couples, repeat buyers, buyers of multi-gen housing, active military and veterans home buyers, as well as senior home buyers.
Of all respondents, senior home buyers represented 8% of survey respondents. These buyers had a median age of 66 and median income of $78,800. While just 5% of this demographic are first-time buyers, 77% are buyers of previously owned homes.
Over the past year, four main reasons drove seniors’ decisions to purchase homes, the foremost being retirement, which garnered 16% of this group’s responses. Other reasons included the desire to own a home of their own (15%), the desire for a smaller home (13%) and the desire to be closer to friends and family (9%).
Typically, most of these buyers opted for single-family homes (79%), townhomes (9%), apartments/condominiums (7%) and other types of housing (5%). The median home price of their purchased residence was $220,000.
Overall in the 2015 survey, the share of first-time buyers declined to 32% (33% in 2014), marking the second-lowest share since the survey’s inception in 1981, and the lowest since 1987, according to NAR.
The housing recovery’s “missing link” continues to be the absence of first-time home buyers, said NAR Chief Economist Lawrence Yun.
“There are several reasons why there should be more first-time buyers reaching the market, including persistently low mortgage rates, healthy job prospects for those college educated, and the fact that renting is becoming more unaffordable in many areas,” he said.
Unfortunately, there are just as many high barriers slowing down first-time buyers, Yun added.
“Increasing rents and home prices are impeding their ability to save for a down payment, there’s scarce inventory for new and existing-homes in their price range, and it’s still too difficult for some to get a mortgage,” he said.
Click here to read highlights from this year’s report.
Written by Jason Oliva