The stereotypical first time home buyer is a young, newly-married couple in their early twenties. In decades past the stereotype was accurate. However, in today’s economy you might as well throw that stereotype right out the window. Today’s typical first time buyer is single and more likely to be in his or her thirties than twenties.
News Transcript reports:
Forget the idea of the young, newly married couple moving into their first home. Today’s first-time homebuyers are older and more likely to be single than those in recent decades, according to a recent Zillow analysis.
The analysis, which looked at data from the Panel Survey of Income Dynamics between 1970 and 2013, found that current first-time buyers are renting for an average of six years before buying their first home. They’re also buying homes that cost more than two-and-a-half times their annual income. In the 1970s, buyers only rented for two and a half years before buying and purchased homes that cost just 1.7 times their annual income.
The extended rental period and higher purchase price for today’s buyers partly can be attributed to where younger, millennial buyers are moving: toward growing job markets in large, more expensive coastal cities.
The average age of a first-time buyer is 33, on the leading edge of the millennial generation, with a median income $54,340 — about the same as buyers earned in the ’70s, adjusted for inflation. Today, just 40 percent of first-time buyers are married, compared to more than 50 percent in the late 1980s.
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