According to the National Association of Realtors, the typical home buyer’s annual household income reached a record high of $107,000 in 2023 – a 22% increase from 2022, reflecting the significant impact that current mortgage interest rates are having on the cost of home ownership.
National Association of Realtors
Releases Annual Stats for 2023
The National Association of Realtors is a great resource for information about housing trends and market activity. Each year, NAR surveys buyers and sellers who completed a residential real estate transaction over the course of the prior 12 months. The resulting report helps us to better understand what’s happening in the market. This year’s NAR report contains lots of interesting data.
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- With interest rates running high and housing prices holding steady, it takes a lot more money to finance a home purchase today that it did before rates jumped in 2022. In 2023, the typical home buyer’s annual household income was $107,000. Of note, the median household income in Pierce County is about $93,000, which means that a lot of people in the county probably can’t afford to buy a median priced home in the current market.
- Somewhat surprisingly, first time home buyers made up 32% of all buyers in 2023 – up from 26% in 2022 but still below the historic average of 38%. First time home buyers may be more comfortable getting into the market if they can afford to now that it’s less competitive.
- Only 30% of recent home buyers had children below the age of 18, the lowest share on record.
- Fourteen percent of recent home buyers purchased a multi-generational home, either to take care of aging parents or to accommodate adult children moving home.
- Eighty percent of recent home buyers financed their purchase, up slightly from 78% in 2022 but down from 87% in 2021 when interest rates were much more attractive.
- The typical home seller in 2023 was 60 years of age and had lived in their home for about 10 years prior to selling.
The take home message is this - most home buyers have to secure financing in order to make a home purchase, the income needed to qualify for financing at current interest rates is higher than the typical Pierce County household earns so high interest rates are limiting the number of potential home buyers in Pierce County.
Mark Pinto is a top-producing Realtor with Windermere Chambers Bay, specializing in residential real estate in Tacoma, Gig Harbor, University Place and Lakewood.
Mark Pinto: (253) 318-0923
MarkPinto@windermere.com
