The National Association of REALTORS® recently released its annual profile of home buyers and sellers. This report summarizes the results from a survey of recent home buyers and sellers who recently completed a transaction between July 2022 and June 2023. In this article, we highlight the key takeaways from the report for 2023, a year that marked the end of the housing boom that followed the COVID-19 pandemic.

  1. Changing demographics and housing affordability shaped the characteristics of the home buyer population.

The share of first-time home buyers increased to 32 percent, up from last year’s historic low of 26 percent, while remaining below the historic average of 38 percent. First-time buyers were likely to have a better chance of purchasing a home this year due to fewer bidding wars, as well as current homeowners staying out of the market due to their low-interest mortgage rates. Prospective buyers are delaying their home purchase decisions as is indicated by the elevated median age of first-time buyers at 35-years old, which is above the norm of 28 to 33. Housing affordability is a probable cause for the median household income going up to $107,000 from $88,000. Only 59 percent of buyers were married couples, which is the lowest level since 2010. Single females continue to make up a larger share of the home buyer population with a slight increase to 19 percent in 2023, while the share of single males also went up to 10 percent. Same as last year, 14 percent of home buyers purchased a multigenerational home to take care of aging parents, for cost savings or because children or relatives over the age of 18 moved back home.

  1. The lack of new construction in the market was emphasized by home buyers purchasing a higher share of previously owned homes.

87 percent of buyers purchased a previously owned home. 13 percent of buyers purchased a new home mostly because they were looking to avoid renovations and plumbing or electricity issues. Detached single-family homes were the most frequently purchased housing type among all buyers. Townhouses and row houses were mostly purchased by single females and single males. Senior-related housing purchases of condos and townhouses saw a significant increase– from 7 percent last year to 19 percent of all sales. Buyers focused on quality of neighborhood, proximity to friends and family as well as affordability while looking for a home. The median expected tenure of buyers was 15 years, unchanged from last year.

  1. Home buyers used the internet to search for a home, but agents remain the top resource.

Most home buyers started their home buying process on the internet. 41 percent of buyers first looked at listed properties online, while 20 percent first contacted an agent. Buyers spent 10 weeks in the home search process, which is the typical timeframe, and looked at a median of seven homes before finding a home to purchase. 52 percent of buyers found the home they purchased through the internet. Real estate agents remain an essential part of the home search process being the most used resource at 88 percent, followed by mobile search devices at 72 percent. 90 percent of recent buyers indicated that they found their real estate agent to be very useful or somewhat useful. Home buyers’ overall satisfaction with the home buying process was at 92 percent.

  1. Nearly all buyers opted to use a real estate professional and would use them again in the future.

Most buyers were looking for an agent to help them find the right home and navigate the current conditions of tight inventory and higher rates in the housing market. 43 percent of buyers used an agent that they found through a referral, while 13 percent chose to purchase through an agent they had worked with in the past. The quality of service that real estate agents bring to the home buying process is made clear by the fact that 90 percent of buyers would use their agent again or recommend them to other buyers.

  1. Most home buyers continue to see purchasing a home as a good financial investment while a majority cited saving for a down payment as the most difficult step in the home buying process.

80 percent of all buyers financed their home, with most first-time homebuyers being more likely to finance their purchase. For all buyers, the median down payment was 15 percent, with first-time buyers putting 8 percent towards down payment, and repeat buyers putting 19 percent towards a down payment. 71 percent of first-time buyers used their savings towards a down payment while 23 percent of first-time buyers relied on a gift or loan from a family member or friend. 53 percent of repeat buyers used proceeds from their past home sales for a down payment. The most common mortgage type used by home buyers was a conventional loan, followed by FHA loans.

  1. In 2023, sellers have stayed in the same home for longer periods of time over the past 30 years.

The median tenure for sellers in their sold homes was 10 years in 2023, mostly due to rising mortgage rates and low inventory. 63 percent of sellers reported moving within the same state, compared to 24% in 2022. Most sellers sold their home to move closer to friends and family, because they had outgrown their previous home, or due to a change in the family situation such as marriage, divorce, or a new child. 89 percent of sellers worked with a real estate agent. Sellers sold their homes for a median of 100 percent of their listing price and the recently sold homes were on the market for a median of two weeks. 92 percent of sellers reported being satisfied with their home sale process.

  1. Most real estate agents provided a broad range of services and the management of most aspects of the home sale.

65 percent of sellers found their agent through a referral or used an agent they had worked with in the past. Three out of four sellers reported that they provided the agent’s compensation. While working with real estate agents, sellers placed a high priority on pricing the home competitively, helping market the home to potential buyers, selling the home within a specific timeframe, and helping find a buyer for the home.

  1. For-Sale-by-Owner (FSBO) sales were at an all-time low this year.

Only seven percent of recent home sales were FSBO sales. In 2023, 57 percent of FSBO sellers knew the buyer of their home and predominantly sold to a friend, relative, or neighbor. FSBO sales were more common in rural areas at 14 percent as compared to in urban areas at 3 percent. FSBO homes sold at a median of $310,000 last year, significantly lower than the median of agent-assisted homes at $405,000.

For more information on housing, demographic and economic trends in Virginia, be sure to check out Virginia REALTORS® other Economic Insights blogs and our Data page.

Sejal Naik
Deputy Chief Economist