Profile of Buyers, Sellers Shows Need for Higher Incomes

Homebuyers entering the market today have higher household incomes than they did at this time in 2017, and real estate experts say buyers need the extra money to remain competitive.

Dwindling affordability from high home prices and interest rates, and low supply continue to restrict the market, and the National Association of Realtors' 2018 Profile of Home Buyers and Sellers finds that buyers able to close today have a median $91,600 household income, a 3.2 percent annual gain. Jessica Lautz, managing director of survey research and communication at NAR tells Realtor.com, buyers with higher income "are able to compete in a multiple-bid situation. For them to be able to qualify for a mortgage today, they have to have a higher income." The NAR surveyed roughly 7,200 buyers who closed on a home between July 2017 and June 2018.

The market is beginning to shift as more homes are making their way onto the market. That's giving buyers more choice and slowing the out-of-control price appreciation of the last few years. But prices aren't going down. The median home price was $250,000 this year, up nearly 6.4 percent from $235,000 last year. It's not just prices that are going up. Buyers are plunking down the largest down payments in more than a decade—a median 13 percent of the purchase price, compared with 10 percent a year earlier. That's the highest it's been since 2005.

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