First-Time Home Buyers Bought 55% of Massachusetts
Homes in 2010
WALTHAM, Mass. – January 12, 2010 – A new study on Massachusetts home buyers and sellers found that the top motivating factor cited by home buyers for the purchase of a home in 2010 was simply the “desire to own a home” and not some of the other well-known benefits. The study also reported that 55 percent of all homes purchased in the Bay State in 2010 were made by first-time home buyers (compared to 50 percent nationally). The data is from the 2010 Massachusetts Profile of Home Buyers & Sellers, compiled by the National Association of Realtors® (NAR), on behalf of the Massachusetts Association of REALTORS® (MAR).
“As a REALTOR® who has been in the business for many years, the finding that ‘The desire to own a home’ is the number one reason why someone becomes a home owner doesn’t really surprise me,” said 2011 MAR President Laurie Cadigan, broker-owner of Barrett & Company in Concord. “While the other benefits of owning a home for both the home owner and the community at large are important, at its core, home ownership is a personal choice.”
When first-time and repeat home buyers were asked “what was the primary reason they purchased a home in 2010,” 36 percent responded it was the “desire to own a home”. The other top reasons included the “desire for a larger home” (8 percent); a “change in family situation” (8 percent); the “desire for a home in a better location” (8 percent); and the “home buyer tax credit” (7 percent).
The median income of buyers (which is reported from 2009 household data) was down to $82,100 compared to $94,800 in 2008 and higher than the $72,200 national median income. Fifty-five percent of home buyers were married couples, 19 percent single females, 12 percent single males, and 13 percent unmarried couples. Thirteen percent of home buyers reported they were born outside of the United States compared to 10 percent nationally.
The median age of the first-time home buyer was 32, which up from 30 years of age in 2009. Fifty-four percent of first-time home buyers were between 25 and 34 years old, while 28 percent were 35-44 years. Only eight percent were 18-24 year years. First-time home buyers in Massachusetts had a median income of $75,900 compared to $59,900 among first-time home buyers nationally.
In 2010, 92 percent of buyers still financed their home purchase (98 percent of first-time buyers compared to 84 percent of repeat buyers). Savings was the chief source of the downpayment for 85 percent of first-time buyers with 48 percent of repeat buyers using proceeds from the sale of their primary residence.
Forty-six percent of all buyers believe that their home purchase was a better financial investment than stocks (compared to 54 percent in 2009); with an additional 31 percent of buyers feeling their home purchase was at least as good an investment as stocks.
The study showed that 94 percent of Massachusetts home sellers chose to work with a real estate professional, which is six percent higher than the 88 percent national average. Only four percent of sellers attempted to sell their home without the assistance of an agent or broker. This is lower than the national share of nine percent. Of those national “For-Sale-By-Owner” (FSBO) sellers, about 58 percent knew the buyer prior to the sale.
The median age of the home seller was 46 years (which is up from 44 years in 2009) and they had a median income of $108,900 (the US median was $90,000). The typical seller owned their home for nine years. Thirty-seven percent of home sellers reported the main reason for deciding to sell was either a change in family situation (e.g., marriage, birth of child, divorce) or their home was too small. Only three percent reported selling their house because they could not afford the mortgage and other expenses of owning a home. This is down from six percent the year before.
When it came to selling, 40 percent of home sellers did not reduce their asking price before the home was sold. Recent sellers typically sold their home for 95 percent of the listing price. Twenty-six percent of sellers did offer incentives to attract buyers compared to 44 percent nationally. Most often that assistance was applied to closing costs, home warranty policies and credit toward remodeling or repairs.
About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 19,000 members. The term REALTOR® is registered as the exclusive designation of members of the National Association of REALTORS® who subscribe to a strict code of ethics and enjoy continuing education programs.
Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.