First-time and single female home buyers on the rebound

The quickening pace of home sales over the past year included a small rebound from two key segments of buyers who have been missing in action in recent years: first-time buyers and single women.

This is according to the National Association of Realtors^®' annual Profile of Home Buyers and Sellers, which also found that for-sale-by-owner transactions remained at an all-time low of 8 percent for the second straight year. Nearly 90 percent of all respondents worked with a real estate agent to buy or sell a home.  

The 2016 edition of NAR's Profile of Home Buyers and Sellers continues the longest-running series of national housing data evaluating the demographics, preferences, motivations, plans and experiences of recent home buyers and sellers; the survey dates back to 1981. Results are representative of owner-occupants and do not include investors or vacation homes.

After slipping for three straight years, the share of sales to first-time home buyers¹ in the 2016 survey ticked up to 35 percent, which is the highest since 2013 (38 percent) and a revival from the near 30-year low of 32 percent in 2015. In the 35-year history of NAR's survey, the long-term average of first-time buyer transactions is 40 percent.  

Lawrence Yun, NAR chief economist, says more new homeowners were able to break through what continues to be a laborious market for many trying to enter. "Young adults are settling down and deciding to buy a home after what was likely a turbulent beginning to their adult life and career following the Great Recession," he said. "Demand increased over the past year because of a robust job market for those with a college degree and renter fatigue at a time when homeowners continue to see their equity rise. These factors were why more first-time buyers (67 percent) said a desire to own a home of their own was the primary reason for their purchase (64 percent in 2015; 53 percent in 2014)."

Added Yun, "Even with the affordability challenges many buyers face, the allure of homeownership is not lost among the younger generation. Those under age 35 made up 61 percent of first-time buyer transactions."

Although the increase in new homeowners is encouraging, their overall share of the market is still subpar, according to Yun. The lack of affordable new and existing inventory, home prices in many markets rising far above wages and difficulty saving for a down payment because of rising rents and student debt is why the homeownership rate for 18- to 35-year-olds is currently hovering near its historical low².

"First-timers' ability to enter the market more convincingly over the next year greatly depends on supply improvements at the lower end of the market and if wages can finally awaken from their sluggish pace of growth," added Yun. 

Single female buyers on the mend, age of first-time buyers on the rise
As in year's past, married couples once again made up the largest share of buyers (66 percent) and had the highest income ($99,200). However, the survey revealed that single women made up more of the buyer pie than in recent years (based on household composition). After falling to 15 percent of buyers a year ago, which tied the lowest share since 2002, single females represented 17 percent of total purchases (highest since 2011 at 18 percent).

"Despite having a much lower income ($55,300) than single male buyers ($69,600), female buyers made up over double the amount of men (7 percent)," said Yun. "Single women for years have indicated a strong desire to own a home of their own, as well as an inclination to live closer to friends and family. With job growth holding steady and credit conditions becoming somewhat less stringent than in past years, the willingness and opportunity to buy is becoming more feasible for many single women."

The median age of first-time buyers in this year's survey was 32, matching the all-time high last set back in 2006, and up from 31 the past five years. The typical first-time buyer had a higher household income ($72,000) than last year ($69,400) and purchased a slightly larger home (1,650-square-feet; 1,620-square-feet in 2015) that was more expensive ($182,500; $170,000 in 2015).

The typical repeat buyer was 52 years old (53 in 2015), earned $98,000 ($98,700 in 2015) and purchased a 2,000-square-foot home (2,020 square-feet in 2015) costing $250,000 ($246,400 in 2015).

Financing the purchase: buyers carrying more student debt
Down payment sizes have roughly stayed the same in recent years. In this year's survey it was 6 percent for first-time buyers (third straight year) and 14 percent for repeat buyers (third time in four years). Fifty-nine percent of buyers financed their purchase with a conventional mortgage, and 33 percent of first-time buyers took out a low-down payment Federal Housing Administration-backed mortgage, which is down from 54 percent in 2011.

"Fewer first-time buyers (40 percent) compared to a year ago (45 percent) indicated that the mortgage application and approval process was somewhat or much more difficult than they expected," said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. "Those with healthy credit scores and manageable or little debt should talk to a lender to see if they qualify. They'll likely discover that obtaining a mortgage isn't quite the confusing and tiring inquisition it was in the years immediately after the downturn." 

Personal savings ranked first for both first-time buyers and repeat buyers as the primary source of their down payment. The second most popular source for first-timers was a gift from a friend or relative (24 percent; 27 percent in 2015), and for repeat buyers it was the sales proceeds from their previous residence.  

Respondents reported that debt (all types) delayed saving for a down payment for a median of three years. For first-time buyers, 40 percent indicated they're carrying student debt, with a typical amount of $26,000 ($25,000in 2015). Furthermore, of the 26 percent of first-time buyers who said saving for a down payment was the most difficult task in the buying process, 55 percent said student debt delayed saving.  

"As NAR survey findings discovered earlier this year, even those financially able to make on-time payments on their student loans are struggling to save for a down payment, and many expect to be delayed from buying a home by over five years," said Yun. "Repaying student debt could slow the path to homeownership even more for those living in markets with steep rents and home prices."  

The home search: single-family homes are a top choice
This year's survey convincingly proved once again that the two most popular resources for home buyers remain the internet (95 percent) and real estate agents (92 percent). Despite a record-high 51 percent of buyers saying they found the home they purchased online, most buyers who used the internet still ended up purchasing their home through an agent (90 percent).

Not surprisingly, mobile devices and tablets are increasingly becoming a resource for home buyers. Their usage lifted to 72 percent in this year's survey, which is up from 61 percent a year ago and 45 percent in 2013. Furthermore, 58 percent of buyers indicated they found the home they purchased on a mobile app.

"Regardless of the plethora of online resources readily available at the click of a mouse or the swipe of a thumb, consumers serious about buying a home continue to seek the expertise and market insights that only a Realtor^® can provide," said Salomone. "Given the numerous competitive markets with minimal supply, it's no surprise that both first-time and repeat buyers sought an agent for assistance finding the right home and negotiating the terms of the sale."  

Similar to recent years, the most common housing type continues to be a detached single-family home (83 percent for second straight year) and one in a suburban area (54 percent; 52 percent in 2015). Meanwhile, purchases of townhouses or row houses remained at 7 percent for the third straight year; only four percent of buyers purchased a condo.  

Overall, the typical home bought was built in 1991 and had three bedrooms and two bathrooms. The share of buyers who purchased new home was at an all-time survey low of 14 percent.

Selling a home: wanting a bigger house primary reason for selling
For the second straight year, 89 percent of sellers sold their home with an agent. This in turn – also for the second year in a row – kept for-sale-by-owner sales to their lowest share (8 percent) since the survey's 1981 inception and below 10 percent since 2012. 

"Although the imbalance of supply in relation to demand in recent year's continues to put many sellers in the driver's seat, they're still looking for a Realtor^® now more than ever to price their home competitively, market their home to the widest number of eyes possible and ultimately help close the deal within a given timeframe," said Salomone. 

The typical seller over the past year was 54 years old (unchanged since 2014), had a household income of $100,700 ($104,100 in 2015), and was in the home for 10 years before selling – a year longer than 2015 and matching the all-time high in 2014. Fewer sellers indicated they wanted to sell earlier but were stalled because their home had been worth less than their mortgage (12 percent versus 14 percent a year ago); the figure was 17 percent in 2014.

Sellers realized a median equity gain of $43,100 ($40,000 in 2015) – a 24 percent increase (23 percent last year) over the original purchase price. Homes sold after 21 years of ownership had the largest equity gain (124 percent or $127,600); underlining the volatility during the downturn, equity gains fell to 3 percent for owners who bought between eight and 10 years ago.

Back in the 2012 survey, it typically took respondents 11 weeks to sell their home. With tight inventory conditions gripping most markets once again over the past year, sellers were considerably more successful finding a buyer in a shorter amount of time, with homes typically on the market for only a month.

A tad more sellers traded up (44 percent) compared to last year (42 percent) and slightly more, at 32 percent, traded down (31 percent in 2015). Sellers moved a median distance of 20 miles – 72 percent stayed in the same state – and the most popular reason given for selling their home was it being too small (18 percent).

Feedback from sellers underscored once again that referrals and repeat business remain a large source of new opportunities for real estate agents. Nearly two-thirds of responding sellers either found their real estate agent through a referral by a friend, neighbor or relative, or used their agent from a previous transaction. Additionally, 85 percent of sellers indicated that they would definitely or probably use their agent again or recommend him or her to others.

NAR mailed a 132-question survey in July 2016 using a random sample weighted to be representative of sales on a geographic basis to 93,171 recent home buyers. Respondents had the option to fill out the survey via hard copy or online; the online survey was available in English and Spanish. A total of 5,465 responses were received from primary residence buyers. After accounting for undeliverable questionnaires, the survey had an adjusted response rate of 5.9 percent. The sample at the 95 percent confidence level has a confidence interval of plus-or-minus 1.32 percent.

The recent home buyers had to have purchased a home between July of 2015 and June of 2016. All information is characteristic of the 12-month period ending in June 2016 with the exception of income data, which are for 2015.

Beer and Sports Go Hand-in-Hand, Almost Always

For many Americans, watching certain sports and enjoying an adult beverage seem to go hand-in-hand.

A recent Harris Poll asked legal drinking age Americans what alcohol beverage types they're most likely to associate with various sports, and what they're most likely to drink while watching and cheering on their favorite sports teams. 

Some sports have a much higher association with alcoholic beverages than others. A majority of those who consume alcohol at least several times a year ("regular drinkers") associate football (84%), baseball (78%), hockey (62%), car racing (66%), horse racing (62%), basketball (60%), and boxing (56%) with one or more alcoholic beverage types. About half associate golf (50%), soccer (48%), and beach volleyball (46%) with adult beverages, while just 4 in 10 do the same with tennis (42%).

These are some of the results of The Harris Poll® of 1,986 U.S. adults aged 21+ (1,394 of whom drink alcohol at least several times a year, i.e., "regular drinkers") surveyed online between August 26 and 30, 2016. Complete results of this study can be found here.

Alcohol and sports pairing

When asked what type of adult beverage first comes to mind when thinking of 11 different sports, it's no surprise that beer is the clear leader for sports like football (75%), baseball (70%), car racing (55%), and hockey (51%). Beer also tops the list, though to a lesser extent, for basketball (48%), boxing (39%), soccer (34%), beach volleyball (25%), and golf (17%). Following closely in second place for golf is spirits/liquor (14%). One quarter of regular drinkers associate horse racing first with spirits/liquor (25%), while wine tops the list for tennis (19%).

"There is no denying the concurrence of watching sports and enjoying an adult beverage.  Given the surrounding business environment connected with professional sports, there is intense competition among those beverages to become that fan's beverage of choice - whether that occasion be at a sporting event or watching that sport at home or elsewhere.  Suppliers would be wise to know which sport(s) offers the best opportunities for their products, and which sports might require greater emphasis in order to elevate their products into the fan's consideration set when they choose an alcoholic beverage," says Danny Brager, senior vice president of Nielsen's Beverage and Alcohol Practice.

Watching in person vs. on television

While not all sports evoke an image of a pint glass, it doesn't stop Americans from picking up a glass while watching. Beer is the beverage most likely consumed while watching any sport, whether in person or on television, among regular drinkers who watch the respective sports.

No matter the beverage, a majority of regular drinkers are tipping something back while watching their favorite sports, regardless of the setting:

• Football: 84% drink any alcohol while watching on television and 83% while watching live
• Boxing: 80% and 81%
• Hockey: 78% and 79%
• Basketball: 78% and 80%
• Baseball: 77% and 81%
• Car racing: 76% and 81%
• Horse Racing: 75% and 80%
• Soccer: 74% and 76%
• Beach volleyball: 73% and 76%
• Golf: 71% and 76%
• Tennis: 67% and 75%

But who's watching?

Nearly two thirds of regular drinkers describe themselves as football fans (63%), while around 4 in 10 say they're a fan of baseball (43%) and/or basketball (37%). Around 1 in 5 regular drinkers each are fans of hockey (22%), car racing/motor sports (20%), boxing (19%), golf (18%), or soccer (18%).

Sports fans do differ across age groups, with Millennial drinkers more likely than those 65+ to be fans of boxing (22% vs. 12%) and soccer (21% vs. 11%), while those 65+ are more likely be a fan of golf (30% vs. 11% 21-34). Perhaps not surprisingly, males are significantly more likely than women – across all age groups – to be fans of each sport.  

Regular drinkers in the Northeast were much more likely to describe themselves as fans of baseball (54%) than all other regions, whereas those in the South (24%) and Midwest (22%) describe themselves as car racing fans more so than the Northeast (14%).

By the Numbers: Halloween

Halloween, which dates back to Celtic rituals thousands of years ago, has long been associated with images of witches, ghosts and vampires. Today, Halloween has evolved into a celebration characterized by child-friendly activities, such as costumes, trick-or-treating and carving pumpkins into jack-o'-lanterns.

Trick or Treat!

41.1 million: The estimated number of potential trick-or-treaters in 2015 — children ages 5 to 14 — across the U.S. Of course, many other children — older than age 15 and younger than age 5 — also go trick-or-treating.
Source: U.S. Census Bureau, 2015 Population Estimates, PEPASR6H

118.3 million: The number of occupied housing units across the nation in the second quarter 2016 — all potential stops for trick-or-treaters.
Source: U.S. Census Bureau, Housing Vacancies and Homeownership, Table 8 

78.7%: The percentage of U.S. households that agreed their neighbors could be trusted in 2013. 
Source: 2013 American Housing Survey 

Hauntingly Delicious

37,128: The number of people employed by U.S. manufacturing establishments that produced chocolate and cocoa products in 2014. This industry's value of shipments totaled $16.0 billion, up from $15.2 billion in 2013.
Sources: U.S. Census Bureau, 2014 Annual Survey of Manufactures, NAICS 311351, 311352

17,815: The number of people employed by U.S. manufacturing establishments that produced nonchocolate confectionary products. This industry's value of shipments totaled $8.2 billion in 2014.
Sources: U.S. Census Bureau, 2014 Annual Survey of Manufactures, NAICS 311340

3,217: The number of U.S. confectionary and nut stores that sell candy and other confectionary products, employing 22,086 people in 2014. 
Source: U.S. Census Bureau, 2014 County Business Patterns, NAICS 445292

Dressed to Thrill

A sampling of occupations that one may dress up as for Halloween:

Source: U.S. Census Bureau, 2015 American Community Survey, B24124

Places to Spend Halloween

Some places around the country that may put you in the Halloween mood:

Tombstone, Ariz. (estimated population 1,312) 
Source: U.S. Census Bureau, 2015 Population Estimates

Sleepy Hollow, N.Y. (estimated population 10,242)
Source: U.S. Census Bureau, 2015 Population Estimates

Kill Devil Hills, N.C. (estimated population 7,058)
Source: U.S. Census Bureau, 2015 Population Estimates

Yellville, Ark. (estimated population 1,169)
Source: U.S. Census Bureau, 2015 Population Estimates

Transylvania County, N.C. (estimated population 33,211)
Source: U.S. Census Bureau, 2015 Population Estimates 

Slaughter Beach, Del. (estimated population 230)
Source: U.S. Census Bureau, 2015 Population Estimates

Casper, Wyo. (estimated population 60,285)
Source: U.S. Census Bureau, 2015 Population Estimates

Scarville, Iowa (estimated population 71)
Source: U.S. Census Bureau, 2015 Population Estimates

Truth or Consequences, N.M. (estimated population 6,079)
Source: U.S. Census Bureau, 2015 Population Estimates

Spooktacular

4,449: The number of motion picture theaters (except drive-ins) in the U.S. in 2014 where one could possibly enjoy a horror movie. California (511), Texas (326), New York (265) and Florida (195) had the most of such establishments. There were 219 drive-in motion picture theaters in 2014 — Ohio had 23, and California and Pennsylvania each had 19 drive-in motion picture theaters. 
Source: U.S. Census Bureau, 2014 County Business Patterns, NAICS 512131 & 512132

40,900: The number of acres of pumpkins harvested in the U.S. in 2015, with a total estimated production value of $90.2 million. Of the top six pumpkin-producing states, Illinois led the country by producing an estimated 318.0 million pounds of this vined gourd, followed by California, Ohio, Pennsylvania, Michigan and New York. Pumpkins are frequently carved as decorations around Halloween.
Source: U.S. Department of Agriculture, National Agricultural Statistics Service, Page 8 

$1.04 Billion: The estimated construction spending on theme/amusement parks in 2015. Halloween events at theme/amusement parks can be frighteningly fun. For more information about construction spending, visit <www.census.gov/constructionspending>.
Source: U.S. Census Bureau, Value of Construction Put in Place Survey

1,078: The number of formal wear and costume rental establishments in the U.S. This industry had 6,611 paid employees across the nation in 2014 (for the pay period including March 12, 2014). 
Source: U.S. Census Bureau, 2014 County Business Patterns, NAICS 532220

302: The number of broom, brush, and mop and casket manufacturing establishments (for the more authentic witches and vampires). Combined, these two industries employed 12,627 people and had a total value of shipments of $3.6 billion in 2012.
Source: U.S. Census Bureau, 2012 Economic Census, NAICS 339994 and NAICS 339995 

$1.03 billion: Dollar value of U.S. fresh apples exported in 2015. Whether bobbing for or dipping in caramel, apples can be a fun treat around Halloween.
Source: U.S. Census Bureau, International Trade Statistics, Commodity Code 080810

Who You Gonna Call?

89.0%: The percentage of households that had a cellular phone in 2011, compared with only 36.0 percent in 1998. The percentage of households with a cellular phone only (no landline) rose from less than 1.0 percent in 1998 to 28.0 percent in 2011.
Source: U.S. Census Bureau, Extended Measures of Well-Being: Living Conditions in the United States, 2011 

Tread carefully this Halloween

Dressing-up and gorging on candy are just two of the many reasons why Americans enjoy Halloween.

But before roaming your neighborhood in your most frightful costume, the American Academy of Orthopaedic Surgeons and the Pediatric Orthopaedic Society of North America (POSNA) urge you to stay alert to potential injury-causing dangers that loom while trick-or-treating.

Research from the National Electronic Injury Surveillance System shows that during 2007-2015:

• Halloween was the holiday with the fifth highest number of emergency room visits among children 18 and younger behind Labor Day, Memorial Day, Fourth of July and Easter.
• Head injuries accounted for the greatest proportion of injuries on Halloween (17.6 percent)
• Of the finger/hand injuries sustained, 23.6 percent were lacerations.
• Children under age 5 (28.8 percent) and children ages 10-14 (28.5 percent) sustained the greatest proportion of injuries.

"Sometimes safety is the last thing on the agenda when having fun," said Joshua Matthew Abzug, MD, a pediatric orthopaedic hand surgeon at the University of Maryland Children's Hospital and an AAOS spokesperson. "Before hitting the streets, parents should educate themselves and their children on the dos and don'ts to ensure safety while trick-or-treating. For example, they should watch out for vehicles, distracted walkers, poorly lit houses and other dangers."

SAFETY TIPS
The AAOS and POSNA offer the following trick-or-treating safety tips:

• Walk on sidewalks and never cut across yards or driveways. Obey all traffic signals and remain in designated crosswalks when crossing the street.
• Costumes should be flame-resistant and fit properly. The child's vision should be unobstructed by masks, face paint or hats. Costumes that are too long may cause kids to trip and fall, so trim or hem them as necessary.
• Bright-colored costumes make it easier for children to be seen at dusk or in the dark. Add reflective tape to costumes and treat bags to provide additional visibility.
• Wear sturdy, comfortable, slip-resistant shoes to avoid falls.
• Trick-or-treaters should only approach houses that are well-lit.
• Both children and parents should carry flashlights to see and be seen. Do not point your flashlight above chest level to avoid obstructing the vision of other trick-or-treaters.
• Be aware of neighborhood dogs when trick-or-treating, and remember that pets can impose a threat when you approach their homes.
• Carry a cell phone while trick-or-treating in case of an emergency.
• Children should always be supervised by an adult.