First-time homebuyers wealthier than years past: Survey

The National Association of Realtors (NAR) released their annual survey showing the median household income for home buyers jumped to $107,000 from $88,000 last year. The survey also showed that first-time buyers made up 32% of all home buyers, which, while an increase from last year's historic low of 26%, is still below the 38% annual average since 1981. Jessica Lautz, NAR Deputy Chief Economist and Vice President of Research joins Yahoo Finance to break down the survey and give insights into these emerging trends in home buying.

Lautz points out an interesting trend: "What we see overall in the US is that there's generally a smaller share of married couples today. We see more single women entering into the market... We see that they're competing against these repeat buyers who have higher incomes, they're saving for longer periods of time, but I have to say that housing affordability is going to impact the singles more than we would see for married couples. "

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

Video Transcript

RACHELLE AKUFFO: Right. Are you in the market to buy a home? Well, you're competing with the typical home buyer whose annual income is at a record high. The typical home buyer is raking in $107,000 per year. This is according to a report out this morning by the National Association of Realtors. Jessica Lautz, National Association of Realtors Deputy Chief Economist and VP of Research is here to break down this report for us.

Thank you for joining us this morning. So as we're looking at, especially these first time home buyers, they made up 32% of all home buyers, up from last year's historic low but still below average. But talk about the demographics. Who are these home buyers who are snapping up these deals?

JESSICA LAUTZ: Well, they're wealthier. We know that the typical home buyer, especially for a first time home buyer, they're essentially making nearly $25,000 more than they were last year so they have to be higher earners to actually enter into today's housing market. They're also tapping their assets. So they're looking at their stocks, they're looking at their 401(k), even cryptocurrency to put down as a down payment.

AKIKO FUJITA: With that said, I mean, this is a really tough market. We've talked so much about the higher rates specifically on the 30 year fixed but also the fact that there are those who are looking for their second home who have equity already built up. So--

JESSICA LAUTZ: Mm-hmm.

AKIKO FUJITA: --how does that stack up for the first time home buyer when inventory is so limited?

JESSICA LAUTZ: Well, that's the thing and that's why we're seeing still historic lows for first time homebuyers is because inventory is incredibly limited. If there's a multiple offer situation, that repeat buyer, who can put down a larger down payment than they have historically, is going to win out on that bid. And in fact, we've seen actual down payments go up to a 20 year high both for first time and for repeat buyers.

And I think that speaks to first time home buyers saying, look, I have the money, I want to enter into the market too, please accept my bid, but we're still seeing that repeat buyers are winning out.

RACHELLE AKUFFO: And I want to talk about household composition, and how much that's changed and how that's affecting who's able to afford some of these homes and where they're buying.

JESSICA LAUTZ: Right. So we're seeing that married couples are dropping, but what we see overall in the US is that there's generally a smaller share of married couples today. So we see more single women entering into the market. I think this is amazing. We see that they're competing against these repeat buyers who have higher incomes, they're saving for longer periods of time.

But I have to say that housing affordability is going to impact these singles more than we would see for married couples.

AKIKO FUJITA: Jessica, that 30% that you alluded to at the top of first time homebuyers who are snatching up these homes, how does that compare historically?

JESSICA LAUTZ: Mm-hmm. So historically, we've seen that first time homebuyers are 38% of the market so we do still see that they're lower than what they have been historically. Yes, we do have a higher share this year than last year but we're still near historic lows, unfortunately.