The median household income of the typical United States homebuyer jumped 22 percent between 2022 and 2023, underscoring the soaring cost of purchasing a home, according to the National Association of Realtors’ 2023 Profile of Home Buyers and Sellers.
The median household income for homebuyers jumped to $107,000 from $88,000 last year as home prices and mortgage rates continued their upward climbs, according to the homebuyer survey results released Monday.
“Given the erosion of housing affordability due to higher home prices and mortgage rates, the household income for those who successfully purchased homes jumped by nearly $20,000 and topped six figures for only the second time in our records,” said Jessica Lautz, NAR deputy chief economist and vice president of research. “In a still-competitive housing market, more well-off homebuyers were able to have their bids accepted by offering larger down payments and even by paying cash.”
Throughout 2023, first-time buyers made up 32 percent of all homebuyers, up from 2022’s historic low of 26 percent. Although that represents an increase, it is well below the 38 percent annual average seen after 1981.
The composition of homebuyer households has also changed significantly, with buyers now less likely to be a young family and more likely to be closer to retirement age, with the typical repeat buyer aged 58 years old — down slightly from the record high of 59 years old set in 2022. Seventy percent of recent buyers did not have a child under the age of 18 in their home, the highest share ever recorded by the NAR. By comparison, in 1985, only 42 percent of households did not have a child in the home.
Fifty-nine percent of recent buyers were married couples — the lowest share since 2010 — while 9 percent were unmarried couples.
Eighty-one percent of buyers were white — down from 88 percent last year — while 7 percent were Hispanic/Latino, 7 percent were Black and 6 percent were Asian/Pacific Islander. Ten percent of buyers were born in another country, up from 8 percent last year.
“Homebuyers in the past year were more diverse, both racially and ethnically, with increases noted among minority buyers, buyers who were born outside of the U.S. and buyers whose primary language is not English,” said Lautz. “This shows encouraging signs that the homeownership rate may narrow in the future as more minority buyers enter the market.”
Eighty percent of buyers financed their home purchase, up slightly from 78 percent last year but still down from 87 percent two years ago. The typical down payment for first-time buyers was 8 percent, which is the highest since 1997 when it was 9 percent.
The typical down payment for buyers was 19 percent, the highest since 2005 when it was at 21 percent. First-time buyers increased their reliance on selling financial assets to secure down payments, such as through the sale of stock and bonds, 401k or pension, IRA, and cryptocurrency.
Eighty-nine percent 0f buyers purchased their home with the help of a real estate agent or broker — an increase from 86 percent last year, according to the report.
“While the housing market had limited inventory and home prices were in flux, buyers and sellers both increased their use of real estate agents,” said Lautz. “Buyers wanted an expert to help them find the right home and conduct negotiations. Sellers also relied on real estate agents and brokers to price their home competitively and market it to potential buyers.”
The typical seller was aged 60, unchanged from last year. Sellers typically lived in their homes for 10 years before moving.
This year’s Profile of Home Buyers and Sellers, the trade organization’s flagship report, tracked transactions between July 2022 and June 2023, according to NAR.