So what does the 2019 home-buyer look like? According to the basic statistics, 33% of homes purchased in 2019 were bought by first-time home-buyers. This continues a trend that started in 2018 of growth among first-time buyers.
First time home buyers tended to be 18-34 years old (60%), and 26% were under 34 yrs old, This may reflect broader generational tendencies to begin to settle down and move less often. Although millennials generally still wait longer to buy a home than previous generations, preferring to rent while paying off student loans, homeownership is still considered part of the American Dream by 74% of the population. In Lynchburg, specifically, homeowners and renters are neck-and-neck at 42.9% and 51.7%.
So home buyers are waiting a little longer to make that first home investment, paying off debt and accumulating a downpayment– 13% of home value was the median, with first-time buyers financing 93% of their home’s value, and repeat buyers financing 84%. Few buyers are banking on interest rates dropping significantly, with 90% signing on a fixed rate. In fact, if the mortgage movements since 2012 continue, we’re likely to continue to see a slow, steady increase in interest rates. These slowly rising rates seem to be influencing the relative strength of the first time home-buyer market, as current homeowners are more reluctant to let go of locked-in low rates from several years ago.
Home-buyers in 2019 tended to depend heavily on internet research during their home search. 19% used the internet for home-buying education, including information about mortgages and neighborhoods. 67% used online databases to look at properties in their areas before visiting in person and 54% of purchasers bought a house they first viewed on the Internet.
Despite this dependence on technology for information, home-buying Millennials are still going to friends and family for recommendations on who to trust! 41% of buyers used an agent referred to them by a friend, neighbor, or relative, and 51% of first-time buyers were more likely to find their agent through a referral. More than 80% of all transactions are conducted through an agent’s existing relationship web. And repeat business is a big part of the market– 90% of buyers (and 86% of sellers) state that they would use their agent again, or refer them to others. It goes to show that there are some things that technology can’t replace, and a working relationship with a knowledgeable, capable professional is one of those things! Here at Karl Miller, we believe strongly that our relationships with our client family only just begins with the sale or purchase of a home. We are here for you for referrals, recommendations, advice, and the occasional friendly fall festival, or summer ball game!