Butter my Buns and Call Me a Biscuit?

In 2010, 51% of all home purchases were made by FTHB. In 2011, it was 37%. The 2010 numbers are skewed because of the First-Time Home Buyer Credit offering.

Overall, the numbers have significantly changed AGAIN. Since the report provides stats on first-time buyers, repeat buyers, FSBO, and investors, this article is strictly about the first-time home buying segment, how the stats compared from 2010 to 2011, and a little commentary from me on why the information is critical in your business planning efforts.

Download the survey now to use in your marketing.

First-time home buyers made up 37% of all homes purchased…

Tip: Still, over one-third of all home buyers are buying for the first time. In this article, you’ll also learn that 92% of FTHB researched the Internet (websites, social media, blogs) before deciding which home to buy and which real estate agent to use. I suggest that you align your marketing with the way FTHB find information – but more on that later.

Living arrangements prior to buying their first home…

77% of FTHB rented (i.e., an apartment or a home) prior to buying their first home. This is up 2% from 2010. 19% lived in a home—a decrease of 2%. Broken down by marital status:

Tip: Over three-quarters of first-time home buyers are living in apartment complexes, and it is still the number one way to market to them even before they start the home search process. Purchase apartment complex mailing lists at ApartmentToolKit.com.

Marital Status of First Time Home Buyer

The big change is the increase of married couples buying their first home.

Tip: If you are holding home-buying seminars, consider segmenting them into “Couples Only” or Singles-Only” First-Time Home Buying seminars. You may want to segment the “singles-only” to “divorced FTHB’s.” Each segment has its own set of home buying and loan approval issues.

Median Age of First Time Home Buyer

This is about the same as last year.

Average Income of First Time Home Buyer

Big change here. A single male’s income significantly decreased while a single female’s income increased slightly.

Purchase Price Range

No big changes here over last year, however the lower-priced homes have had a slight increase. It’s probably due to the fact that the home values have been decreasing.

TIP: While some areas are more affordable than others, 48% of FTHB purchased a home at $150,000 or less. Review all your listings and see if you can negotiate seller incentives or special financing options like FHA and USDA (if the property qualifies).  I can help you with flyers showing these incentives for your open houses.

Moving Distance from Current Residence

The distance from where a FTHB is living now to their new home is 12 miles. That has not changed over the last 3 years. It’s the same if living in an apartment or with parents/family.

TIP: If you are marketing to apartment complexes, consider the location of the complex in relation to the housing price ranges for FTHB. Check to see if the subdivisions within a 12-mile radius have housing prices at $150K or below. If not, you may not want to market to those complexes.

Information Source Prior to Buying a Home…

The typical buyer who used the Internet is 42 years old (up from 37 yrs. in 2010) with an average income of $83,700. The typical buyer who did NOT use the Internet is 60 years old (Up from 57 yrs. in 2010) with an average income of $60,300. Those using the internet took twice the amount of time to find a home versus those that did not use the web. Interesting?????

TIP: If you are spending money advertising in your local homes’ magazines, or if you are paying to publish rates in the newspaper, you may want to reallocate your money to online marketing instead.

Financing the home purchase…

It’s the same as last year—95% of home purchases were FIXED RATE Mortgages.

TIP:When it comes to fixed rate mortgages, let's be different than everyone else and instead of offering a 30-year term, give them an alternative 25-year fixed rate option. The payment is a little higher per month, but the interest savings is significant ($30K for $100,000) and they build up equity quicker. Think about this — if only LO’s had offered more 25-year fixed rate mortgages in 2005-2006, there would be a lot less people upside down on their homes.

Source of Down Payment...

The percentages have increased over the last 3 years, indicating that people are buckling down and saving more money.

TIP: Fannie, Freddie, FHA and VA have their own “gift fund rules.” For example, there are 5 different ways funds can be gifted for FHA loans. They are complicated and just one little error will hold up your closing. 

First Time Tenure in Resale of Home

TIP: It used to be that the average time people plan to sell their home and buy another one was 7 years. Looks like the two new time frames are from 4 to 5 years and from 8 to 10 years. Plan to stay in touch with past clients for the long haul.  If you don't have a system in place to keep in contact with them on a consistent basis, I can help you with that.  I have the tools to work for you so you don't!

FINAL MARKETING TIP:

I have an incredible customer retention program that is very automated, doesn't cost you anything and it will keep your name and information in front of your client for at least the next 5 years or more! Just remember, if you don't keep your name in front of them, someone else will!

Let me know if you found this article and the tips useful and anything else you'd like to share!