Repeat Buyers: Backbone of Housing Recovery
August 13, 2013
The growing ranks of repeat home buyers are helping to drive the housing recovery, making up for the dwindling numbers of first-time buyers.
Repeat home buyers accounted for 54 percent of existing-home sales in June, up from 49 percent just one year prior, according to the National Association of REALTORS®. Meanwhile, first-time buyers — who usually account for 40 percent of the market share — shrank to 29 percent in June. A lack of lower-priced homes and strict lending requirements are edging more first-time buyers out of the market.
“What we’re seeing are these buyers who’ve waited around and who have finally realized this is a good time to move,” says David Crowe, chief economist for the National Association of Home Builders. “They will feed the demand until our economy gets a little more solid.”
Rising home prices are increasing household wealth and pushing more home owners to sell, either to trade up for bigger properties or to use the greater equity in their homes to put down a larger down payment for a comparable home, Bloomberg reports.
“The economy looks to be on a sounder footing, home prices are rising, and expectations are that they’ll continue to increase,” Michelle Meyer, a senior economist at Bank of America in New York, told Bloomberg. “Not only would they be able to sell their current property, but also in terms of purchasing their larger home, they’ll feel that their homes will appreciate with time.”
Source: “Home Sales Buoyed by Repeat Buyers,” Bloomberg (Aug. 11, 2013)
Updated: November 25, 2020