Thursday, June 13

Fewer People Finding a Spouse Before Their First House, Zillow Finds

In the past, buying a first house has often been a step that married couples take together. But a recent Zillow analysis has concluded that now, more than half of first-time homebuyers are single.

According to data collected between 2010 and 2013, only 40% of homeowners were married when purchasing their first homes. That’s compared to 52% in the late ’80s.

“The characteristics of typical first-time buyers have changed dramatically,” report author Cody Fuller, an economic analyst at Zillow, observed in his analysis, released Aug. 17.

His conclusions dovetail with another recent study finding that single women, in particular, are increasingly getting into the real estate market; in fact, they’re buying homes at twice the rate of single men.

First-time buyers are renting for longer before buying homes, however. Between 1970 and 1974, the earliest years for which data are available, first-time buyers had rented for a median of only 2.6 years before striking out on their own. By 2013, that number more than doubled, reaching an even six years.

They’re also buying homes that are more expensive, both in terms of raw cost and as a percentage of their incomes. Currently, homebuyers pay a median of $140,328 for their first houses. That comes out to 2.6 times their incomes; in the late ’80s, buyers bought homes costing 1.9 times their incomes.

The Importance of First-Time Buyers

First-time homeownership is an important marker of health in the overall real estate market, which is why first-time buyers are at the center of so many real estate analyses. Last year, 38% of all homebuyers were first-time buyers.

Additionally, as Fuller mentions in the new report, first-time buyers drive the real estate market because the market is essentially a ladder, with people starting off renting and moving up rung by rung as their needs change.

“First-time buyers are perhaps the most critical rung on the ladder, as they both purchase the entry-level homes occupied by slightly older families, and allow those more mature families to sell their home and use the proceeds to help them move up,” Fuller explains. “By moving out of rental housing and into homeownership, first-time buyers also help ease rental demand, making it easier for their younger brethren to get started up the ladder themselves.”

The full analysis, including interactive infographics, is available online.

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