The Realtor survey was sent out in late July to 55,751 randomly-selected residential Realtors. NAR received 1,919 responses by the mid-August close date of the survey. The homebuyer survey was conducted by Morning Consult in June 2023. Of the 2,201 respondents, 587 were white, 560 were Hispanic/Latino(a), 533 identified as African-American/Black and 521 identified at Asian American or Pacific Islander (AAPI).
In the realtor survey, Millennials were the largest home buyer generation represented. Forty-two percent of agents reported that they were working with Millennials, followed by Gen X at 22%, Baby Boomers at 12%, Gen Z at 8% and Civics (those aged 78 and older) at 1%.
White homebuyers were the largest racial group represented at 58%, followed by Hispanic/Latino(a) at 11%, African-American/Black at 10% and Asian-American at 3%.
Over half of the Realtors (51%) reported they their buyers were first-time buyers. In the buyer survey, 71% of white respondents reported they currently own a home, while 67% of African-American/Black responses said they do not currently own a home. In addition, 89% of Hispanic/Latino(a) buyers, as well as African-American/Black buyers said they will be first-time buyers, compared to just 65% of white respondents.
When broken up by race or ethnicity, white buyers are more likely than other races to report not yet having a purchased a home mainly due to lack of availability in their budget, while Hispanic/Latino(a) buyers are more likely to be hampered mainly by the inability to save a sufficient down payment. AAPI buyers are most likely to be waiting for prices to drop and African-American/Black buyers are most likely to report trouble getting approved for a loan due to credit issues as the main reason they have not bought yet.
Generationally, Gen X (12%) and Baby Boomer (11%) buyers are more likely than other generations to be waiting for prices to drop (only 9% of Gen Z buyers and 6% of Millennial buyers are waiting for prices to drop). However, Baby Boomers are the least likely to be concerned about competing with all-cash buyers, with just 24% listing this as a concern compared to 34%-42% for the other generations.
Exploring finance options
According to the Realtor survey, 77% of their prospective buyers who have applied for a loan, have been approved, while 6% have applied but been denied. Of those who have been denied, 12% report it is due to low credit score and 9% report it was due to insufficient down payments.
Black/African-American buyers who have not been approved for a loan are more likely than other racial or ethnic groups to have been denied due to low credit scores, at 32% versus 17% or less for the other racial and ethnic groups.
Realtors reported that 68% of their buyers were considering a conventional loan, 38% were considering an FHA loan, 8% were considering a VA loan and 7% said their buyers did not need home loan financing. FHA loans more likely to be considered by African-American/Black and Hispanic/Latino(a) buyers than white and AAPI buyers, and white and AAPI buyers were most likely to not need financing, at 8% and 9% respectively, compared to 4% or less for other racial and ethnic groups. Broken down on generational lines, 25% of Baby Boomers report not needing financing, compared with just 8% or less for younger generations.
First time buyers (54%) are more than twice as likely as repeat buyers (22%) to consider an FHA loan. Divided among racial and ethnic groups, African-American/Black buyers (62%) and Hispanic/Latino(a) buyers (57%) are more likely to consider FHA loans than other groups (34% or less). Generationally, younger buyers are more likely to consider FHA loans with 57% of Gen Z buyers reporting they have considered an FHA loan, compared to 11% of Baby Boomers.
Among buyers who were eligible for FHA or VA loans, 20% of realtors said their buyer clients have not considered VA or FHA because they do not want to pay private mortgage insurance (PMI) (21%) or they are worried their offers will be less competitive with these options (19%).
According to the survey, 53% of realtors say that at least one issues is holding their latest buyer back from saving a competitive down payment, with 23% reporting current rent or mortgage payments holding buyers back, 17% reporting credit card balances or payments, 12% reporting student loan debt and 11% citing car loans.
First-time buyers are significantly more likely to struggle with these challenges than repeat buyers, with twice as many first-time buyers reporting that they are struggling with credit card payments (22% vs. 11%), and student loan debt (17% vs 7%). When broken down via race and ethnicity, AAPI (52%) and white buyers (52%) were more likely than African-American/Black buyers (31%) and Hispanic/Latino(a) buyers (36%) to report that nothing was holding them back from saving for a down payment. Along generational lines, younger buyers are more likely to be held back by student loan debt (20% of Gen Z, 15% of Millennials, and 8% or less for older generations), car loans (16% of Gen Z vs. 3% of Baby Boomers) and childcare expenses (12% of Gen Z, compared to 2% of Baby Boomers). Overall, the older the buyer the more likely that none of the above issues are holding them back from saving for a down payment, with 70% of Baby Boomers reporting that none of these issues are holding them back compared to 40% of Gen Z buyers.
Despite their challenges, only 23% of Realtors reported that their buyers dealing with these challenges have applied for down payment assistance programs, while 12% of consumers reported that they were unaware of these programs.
The number one reason, at 30%, Realtors cited as to why their buyers who were aware of down payment assistance programs did not apply was that their income was too high. This was followed by 19% who said their buyers didn’t know enough about the programs and 17% who were worried about the competitiveness of their offers in a multiple bid situation.
First time buyers were three times more likely to have applied for down payment assistance programs than repeat buyers at 30% compared to 10%. Similarly, the younger the buyer, the more likely they are to have applied for a program, with 36% of Gen Z buyers reporting they had applied versus 11% of Baby Boomers.
Among racial groups, AAPI buyers were the least likely to have applied to a down payment assistance program at 13% versus 22%-31% for other groups. In addition, they were the most likely to say they were unaware of the programs at 26% compared to 8%-13% for other racial groups.
Location, Location, Location
When determining the location of their future home, 71% of realtors reported that their buyers were determining the location of their next home base on the location of their job or the job of someone in their household. Of the remaining roughly 30%, 16% said their buyer work fully remote and 14% reported that they buyers are retired. They are typically looking for 30 minutes or less of driving time (consumers reported 25 minutes or less).
Baby Boomer were the most likely to be retired at 61% compared to 2%-9% of other generations, while Gen X buyers were the most likely to work fully remotely at 24% versus 9% to 14% for other generations. Millennials (84%) and Gen Z buyers (86%) are the most likely to determine the future location of their home based on the location of their job (28% to 67% for older generations), and similarly, first-time buyers (83%) are more likely than repeat buyers (57%) to determine location based on the location of their job.
Compared to other racial or ethnic group, Hispanic/Latino(a) buyers were most likely to determine the location of their future home based on the location of their jobs, at 82%, compared to 69% to 74% for other groups. White (16%) and African-American/Black buyers (12%) were the most likely to be retired or not workings (other groups ranged from 7% to 8%).
Nearly half (49%) of Realtors said their buyers have no preference between existing and new construction, however white buyers were significantly more likely than other racial groups to prefer existing homes at 46% compared to 27% to 35% for other groups.
The vast majority of Realtors (89%) said their buyer clients were buying a primary residence, while 6% reported they were buying an investment property and 5% said they were buying a vacation or rental home.
Discrimination remains under reported
Of the Realtors surveyed, 1% of Realtors reported that their buyer experienced discrimination during buying process, while 13% were unsure. Among the 14 Realtors who reported that their buyer experienced discrimination, the most common form of discrimination came in the form of loan products offered by the lender (43%) or that the buyer did not receive a call back from the lender (29%). Realtors who reported that their clients experience discrimination, said the most common reason was race (57%), followed by age (29%), and familial status (21%).
Other common sources of discrimination reported were color, religion and national origin (all at 14% each), as well as sex, disability and sexual orientation (all at 7% each).
Despite experiencing discrimination only 7% of the agents said their clients reported the discrimination to a government agency or legal aid organization.
In the consumer study, roughly one in six prospective buyers reported experiencing discrimination during their home buying process, with more than half of Black, Asian, and Hispanic buyers reporting that this was due to their race or ethnicity. White buyers are equally likely to report discrimination but are more likely than others to say this was based on factors other than race or ethnicity. NAR reported that based on both studies is believes that most of this discrimination goes unreported.
Consumers who experience discrimination reported that this most often manifested in their being steered towards or away from specific neighborhoods and in stricter requirements. Among successful buyers 50% of Hispanic/Latino(a) buyers experienced steering, compared to 29% of white buyers and 12% of African American/Black buyers, while 17% of AAPI buyers, 24% of White buyers and 12% of African American/Black buyers reported stricter requirements.