Some very good intel

The NAR released something that we look forward to every year–its annual survey of recent home buyers. The report gives us a thorough breakdown of typical buyers in terms of age, income, gender, marital status, and more. It is always full of good info, and this year’s report is no exception.

In our first story, we summarize one of the big takeaways from this year’s survey: older buyers are truly taking over the market. In fact, the average age of buyers is up TEN YEARS from last year. That is truly a staggering stat.

We dive into that, and much more, in today’s edition of the Blueprint, so let’s jump in now.

– James and David

Older buyers are dominating the market

The average age of home buyers is now 59 years old, a new high, up from 49 years old in 2023. Meanwhile, the average age of first-time buyers is 38 years old (up from 35), while the average age of repeat buyers is 61 years old (up from 58). These findings come from the National Association of Realtors’s (NAR) annual survey of recent home buyers. Here’s what else the report reveals:

• First-time home buyers now make up just 24% of the market, a record low, down from 32% last year. 

• Buyer household incomes reached a record $108,800, up from $107,000 in 2022.

• First-time buyers earn $97,000 on average, up from $95,000 last year and $71,000 in 2021.

• Repeat buyers earn $114,300 on average, up from $111,700 last year.

Our take

Since 1981, NAR’s annual buyer and seller report has offered in-depth insights into home buying and selling trends over the past year. This year’s report is no exception. It’s full of interesting demographic data, and we encourage you to read it all. As you can see above, this year’s data highlights the growing income gap between first-time and repeat buyers, as new buyers now need much higher incomes to enter the market. Consequently, older buyers are taking up a larger share of the market.

We have an exclusive offer for all of our readers! Save up to $3,000 off of BoldTrail Pro when you check out BoldTrail, our game-changing CRM that powers our business. It offers:

• smart CRM tools

• lead generation

• customizable IDX websites

Whether you’re focused on growing your business or just want to streamline day-to-day tasks, BoldTrail’s got you covered. Plus, it’s flexible enough to fit any business model. Want to see how it works? Click here to save up to $3,000 off of BoldTrail Pro.

Markets with the biggest housing shortages

Low housing supply keeps causing median home prices to rise. September marked the 15th consecutive month of annual growth, as prices rose 3% year-over-year, according to newly-released data from NAR. The housing shortage stems from several key factors that inhibit new housing development, including a limited construction workforce, insufficient issuance of building permits, and restrictive zoning regulations.

Here are the top 10 metros with the biggest housing shortages for single-family homes:

1. New York-Newark-Jersey City, NY-NJ-PA 

2. Urban Honolulu, HI 

3. New Haven, CT 

4. Miami-Ft Lauderdale-West Palm Beach, FL 

5. Bridgeport-Stamford-Norwalk, CT 

6. Champaign-Urbana, IL 

7. Hartford W-Hartford E-Hartford, CT

8. Oxnard-Thousand Oaks-Ventura, CA

9. Syracuse, NY 

10. Buffalo-Cheektowaga, Niagara Falls, NY

Our take

High home prices are primarily driven by the limited supply of available homes, particularly in metros with strong job growth and rising populations. This shortage makes affordable housing increasingly hard to find for many buyers in these regions. Since the pandemic, construction jobs have grown three times faster than overall employment, but housing supply still lags behind demand in high-growth areas. Nearly 80% of these metro areas issued too few housing permits compared to job growth. As a rule of thumb, one single-family permit should be issued for every two new jobs, but the majority of metros missed this mark last quarter.

Tracking 40 years of home price growth

In 1984, Freddie Mac began tracking home prices. Since then, values have surged by an amazing 490%, as of this August. According to ResiClub, coastal states like Maine and California have seen the steepest and fastest increases, largely due to a combination of geographical limitations and strict regulatory building constraints that have restricted new development.

Here are the states where home price gains have soared the most over the past 40 years:

1. Washington: +810%

2. Oregon: +734%

3. Rhode Island: +682%

4. California: +655%

5. Hawaii: +646%

6. Montana: +645%

7. Massachusetts: +624%

8. Maine: +619%

9. Idaho: +610%

10. Utah: +606%

Our take

We know past performance doesn’t guarantee future results, but this is an amazing track record for home prices. Nearly all homeowners who held on through the dips ended up making money. Real estate is truly a great investment vehicle. However, it isn’t for everyone. You have to be willing to hold the asset for at least 3-5 years before you see substantial equity returns. Agents should keep this report on-hand. It’s a great way to show clients how valuable real estate can be in the long term.

Your Listing, Your Lead

Over 100 Million buyers uses Homes.com, the fastest growing home search site. Put your best profile forward with a Homes Pro membership—amplifying your real estate brand with premium tools, priority visibility, and enhanced exposure across the internet with Homes.com.

[Signup Today!]

The news that just missed the cut

• 4 major wins for YIMBYs on election night — and one loss

• Top real estate podcasts for agents and brokers

• 16 ways sellers can help make a sale happen 

• Here’s where mortgage rates are headed, according to Housingwire

• The implications of the Trump administration on the housing market

Foundation Plans

Advice from James and David to win the day

While the bulk of your business should come from listings, a portion of your business will invariably involve representing buyers. We believe every agent should strive to provide such overwhelming value that buyer clients will refer you to friends and won't object to paying your commission fee. Here are some tips for buyer agents:

Be ready with your buyer presentation – Present to your buyer clients just like you would in a listing presentation. Outline all steps of the process–your role, the homebuyer’s role, and how you’ll work together. We’ve seen it work. You’ll start competing for buyer business just like you do for listings.

Make sure to sign a buyer agreement – It’s now essential. Following the recent NAR settlement, realtors are required to have a written agreement with buyers before showing any property. This new rule emphasizes the importance of clear communication and defined expectations between realtors and clients. If you need one, here’s a well-regarded sample agreement form created by University of Buffalo contracts professor Tanya Monestier.

Come with financing options – We’re not telling you to pretend to be a mortgage lender — in fact, we’re telling NOT to do that – but you should be able to competently discuss options such as rate buy-downs, adjustable-rate mortgages and how to pay points to lock in a lower rate on a 30-year fixed mortgage. Make sure to include your buyer’s lender into the mix, along with the loan officer. Overwhelmingly, buyers don’t have a clue about the homebuying process, especially about the financials. Score some real brownie points here by adding value in this regard. 

Stay ahead of the process – You must be more proactive than your buyer in the property search. If they’re dying to be in one specific neighborhood, door-knock that neighborhood for them to discover the next motivated seller. Manage the inspection process so they don’t freak out over small items. Help set up their utilities, recommend movers, connect with homeowner’s insurance companies, and do anything else to alleviate stress. Show your value by doing the thinking and planning for them.

For more advice on how to up your buyer agent game, start here and here! 

To learn more about Estate Media, visit their website.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

That’s a wrap on this edition of The Blueprint!

Remember: each day is a gift and a new opportunity to lead the life you want and to become the person you want to be. The mistakes and missteps you’ve made in the past don’t define you. Live as intentionally as you can and be ruthlessly focused on the goals you’ve set out to achieve. You can do it!

Thanks for reading, and we’ll see you back here on Tuesday!

– James and David