Dual income households are comprising a greater portion of the housing market and helping sales recover, according to an annual study released recently.

The 2012 National Association of Realtors Profile of Home Buyers and Sellers continues a long-running series of large national NAR surveys evaluating the demographics, preferences, motivations, plans and experiences of recent home buyers and sellers.  The responses are heavily representative of owner-occupants and do not include most investors.

Sixty-five percent of all buyers are married couples, 16 percent are single women, 9 percent single men, 8 percent unmarried couples and 2 percent other; percentages of single buyers were slightly higher in 2011. However, just two years ago, 58 percent of buyers were married, 20 percent were single women, 12 percent single men and 7 percent unmarried couples; the overall market share of single buyers declined a total of 7 percentage points over the past two years.  Before 2010, the market shares moved within a very narrow range, generally a percentage point or two.

Paul Bishop, NAR vice president of research, said the study is painting a clearer picture of the impact of mortgage limitations.  “We’ve known for some time that stringent mortgage credit standards have been holding back home sales, but these findings show single buyers have been hurt the most over the past two years.  Total home sales would be 10 to 15 percent higher without these unnecessary headwinds,” he said. 

“The continued growth in married couples as single buyers shrink demonstrates that households with dual incomes are more successful in obtaining a mortgage.  However, given the historically favorable housing affordability conditions, most single-income buyers could also purchase a home and stay well within their means, if lending requirements were more sensible,” Bishop said.

First-time home buyers edged up to a 39 percent market share in the past year from 37 percent in the 2011 study.  Long-term survey averages show that four out of 10 buyers are typically first-time buyers, who are critical to a housing recovery because they help existing home owners to sell and make a trade.

The study shows the median age of first-time buyers was 31 and the median income was $61,800.  The typical first-time buyer purchased a 1,600 square-foot home costing $154,100, while the typical repeat buyer was 51 years old and earned $93,100.  Repeat buyers purchased a median 2,100-square foot home costing $220,000.

The median downpayment for all home buyers was 9 percent, ranging from 4 percent for first-time buyers to 13 percent for repeat buyers. “First-time buyers historically make small downpayments, but repeat buyers like to put down 20 percent if they can to avoid paying mortgage insurance,” Bishop said.  “The general loss in home value since the peak of the housing boom means many repeat buyers in recent years had to make smaller downpayments.  Fortunately, prices have turned up this year and are showing sustained increases, so we’re on the road to a recovery in home equity.”

First-time buyers who financed their purchase used a variety of resources for the downpayment:  76 percent tapped into savings; 24 percent received a gift from a friend or relative, typically from their parents; and 6 percent received a loan from a relative or friend.  Eleven percent tapped into a 401(k) fund, and 6 percent sold stocks or bonds.  Ninety-three percent of entry-level buyers chose a fixed-rate mortgage.

Forty-six percent of first-time buyers financed with a low-downpayment FHA mortgage, and 10 percent used the VA loan program with no downpayment requirements.  Forty-two percent cut spending on luxury items to buy their first home, 35 percent cut spending on entertainment and 27 percent cut spending on clothes.

Seventy-eight percent of recent home buyers said their home is a good investment, and 46 percent believe it’s better than stocks; 92 percent were satisfied with the buying process.

The typical buyer began their home search online and then contacted a real estate agent.  Buyers who used an agent searched a median of 12 weeks and visited 10 homes, down from 12 homes in 2011.  “The decline in the number of homes visited reflects a tighter inventory environment that became more pronounced during the second half of the survey period,” Bishop explained.  “It makes sense that buyers are seeing fewer homes in the current market.”

Buyers use a wide variety of resources in searching for a home.  Top results show 90 percent use the Internet, 87 percent use real estate agents, 53 percent yard signs, 45 percent attend open houses and 27 percent review print or newspaper ads.

When buyers were asked where they first learned about the home they purchased, 42 percent said the Internet; 34 percent from a real estate agent; 10 percent a yard sign or open house; 6 percent from a friend, neighbor or relative; 5 percent home builders; 2 percent directly from the seller; 1 percent a print or newspaper ad; and less than 1 percent from other sources.

Ninety-one percent of home buyers who used the Internet to search for a home purchased through a real estate agent, as did 71 percent of non-Internet users, who were more likely to purchase directly from a builder or from an owner they already knew in a private transaction.

Local metropolitan multiple listing service websites were the most popular Internet resource, used by 54 percent of buyers; followed by Realtor.com, 51 percent; real estate agent websites, 47 percent; real estate company sites, 39 percent; other websites with real estate listings, 27 percent; search engines, 19 percent; mobile or tablet apps, and for-sale-by-owner sites, 13 percent each; mobile or tablet websites, 12 percent; and mobile or tablet search engine, 11 percent; other categories were notably smaller.

While sellers had been in their previous home for a median of nine years, first-time buyers plan to stay for 10 years and repeat buyers plan to hold their property for 15 years.

The biggest factors influencing neighborhood choice were quality of the neighborhood, cited by 61 percent of buyers; convenience to jobs, 43 percent; overall affordability of homes, 39 percent; and convenience to family and friends, 35 percent. Other factors with relatively high responses include neighborhood design and convenience to shopping, 26 percent each; quality of the school district, 25 percent; convenience to schools, 22 percent; and convenience to entertainment or leisure activities, 19 percent.