The second quarter of 2015 saw a healthy increase in home sales with three of the strongest months since the recovery. Home sales in May hit their strongest pace since November 2009; this trend also continued in June 2015, as sales hit their strongest pace since February 2007.
Home sales increased 3.2 percent in June to a seasonally adjusted annual rate of 5.49 million.
The market performance in the second quarter of 2015 shows the promise of a healthy market that is recovering at a comfortable steady pace. One of the contributing factors to the rise in home sales is the increase of first-time home buyers who remained mostly inactive during the recovery.
First-Time Home Buyers are Starting to Move In
Historically, first-time home buyers make up 40 percent of buyers. They were at 32 percent in May, up from 27 percent at the same time last year.
First-time home buyers are important in the housing market because they fuel additional demand allowing existing home owners to “trade-up.”
With the rental market tightening and mortgage rates still low, many first-time buyers see now as good time to buy. And they are correct.
New research by TD Bank indicated that nearly one-in-five potential first-time home buyers are actively looking to buy their first home.
The study also found that when it comes to home amenities, first-time buyers are most interested in having a backyard or pool and an attractive design as well as energy efficient / smart homes technologies.
With the expected increase in first-time home buyers in 2015, here are some helpful tips for working with millennial home buyers.
- First-time home buyers may have more questions. Be prepared with answers. Have a list of FAQs available for your clients to help education them.
- Be purposeful in your searches. Unless your clients appreciate the financial requirements for buying a fixer-up home, most first-time home buyers are interested in move-in ready homes.
- The average age of first-time home buyers is 31. This puts them in the millennial category. Millennials are notoriously connected to technology. Make sure to share your KW Mobile App as their smart phone is likely to be their house hunting tool of choice.
Thirsty for more information?
Don't miss Gary Keller's Market Update at Mega Camp 2015 in Austin, Texas. Gary will deliver the much anticipated review of U.S. and Canadian housing trends as well as a discussion about we can anticipate for the remainder of 2015.
Stay tuned on the KW Blog for more Q2 2015 Market Aha's. We will publish new posts concerning home prices/affordability, unemployment, housing starts and GDP. Subscribe to the KW Blog and never miss an important post.