First time home buyers aren’t who they used to be, necessarily. Forgive my conventional outlook, but this was how I always pictured it: you rent a not-so-great home through college and afterward until you get a good enough job to start thinking about settling down. You get married. Buy a house. Start a family. And in addition to finding your person, which is seriously hard enough, you also have to worry about having great credit and enough savings to put down a decent down payment. Once you’re there, it’s probably just two of you who are going to live there, plus maybe a dog… and the first house you buy is probably being sold by a family who has just started outgrowing it, and that slightly older family probably earns at least slightly more than you, and they are out shopping for a bigger, better house, maybe in a nicer neighborhood. Who’s house do they buy? Probably a larger family home with lots of bedrooms and a big yard whose owners have been accruing equity for many, many years now. And now that their kids have moved out and into their first not-so great apartments, and started trying to find their person, the empty nesters decide to liquidate that equity and buy a smaller home. They might buy something low-maintenance and practical, like a condominium.
Sure, I may have simplified it, since the average American moves every 5-7 years, but I think the summation works. It is the nesting doll of house stories. The home that you spend the most years in, maybe raising your family in, is full of the stories of increasingly littler homes that came before… and then finally you put that doll on a shelf in your condo.
What’s even more interesting is that increasingly, those empty nesters might accidentally end up sharing a wall with their first-time home buyer kids. According to zillow.com, first time home buyers are buying a larger share of condominiums and less single-family homes than in the early 2000's. That goes hand in hand with my personal observations about affordable smaller homes. I find that when a new listing pops up that offers single-level living, easy accessibility to shopping, practical upgrades, and not too much space, my immediate thought is to send it my first time home buyers who want a start-up home, and to send it to my empty nesters who are looking to down-size.
I think realtors everywhere are seeing the same phenomenon, if we can call it that. Also interesting is the statistic that first time home buyers are now less likely to be married when they purchase their first home. They’re also older, at an average of 31, and oddly enough, they’re not making any more money than in past years, but they’re buying nicer first homes than ever before. With FHA programs and lenders asking less for down payments and relaxing attitudes about credit scores and income-to-debt ratios, home buying is within reach for more people, it seems. So, kids, if you’re older than you thought you’d be when you bought your first house, and you’re not married, relax, you’re in good company. If your parents don’t trust that your taste is in line with your income, just remind them the PMI is punishment enough- and try to be nice to each other because you may just end up being neighbors in the same building!