Confessions of 2023 Home Buyers and Sellers: Key Trends and Insights

The confessions of 2023 home buyers and sellers reveal significant shifts in the real estate market. With rising interest rates, inventory shortages, and changing buyer preferences, the market has transformed. The National Association of Realtors (NAR) released its annual Profile of Home Buyers and Sellers, offering critical insights into these changes. This report, based on transactions completed between July 2022 and June 2023, highlights trends in home search behavior, financing, and agent interactions. Understanding these patterns is crucial for buyers, sellers, and real estate professionals navigating a dynamic market.

Who Were the 2023 Home Buyers?

In 2023, the typical first-time home buyer was 35 years old, slightly younger than in previous years. Married couples made up 59% of buyers, the lowest share since 2010, while 19% were single females, 10% were single males, and 9% were unmarried couples. Surprisingly, 70% of buyers did not have children under 18 in their homes, a trend that reflects shifting demographics and lifestyle preferences.

Buyers largely prioritized location, with 60% citing the neighborhood as a top factor in their purchase decision. Additionally, 45% wanted to live near friends and family. Interestingly, only 39% cited affordability as their primary concern, suggesting that buyers were willing to stretch their budgets to secure homes in desirable areas.

How Did Buyers Find Their Homes?

The home search process continues to be dominated by online tools, with 90% of buyers using the internet to search for properties. While online searches were critical, 80% of buyers still relied on real estate agents for guidance and transaction support. Only 20% contacted an agent as their first step, with most beginning their journey online before engaging a professional.

Buyers typically spent 10 weeks searching and viewed seven homes before making a purchase. Virtual resources played a significant role, as floor plans and detailed property descriptions were among the most valued online features.

Financing Challenges for Buyers

Despite rising mortgage rates, 80% of home buyers financed their purchase, with 54% relying on personal savings for their down payment. Among repeat buyers, 53% used proceeds from a previous home sale, while 23% of first-time buyers relied on financial gifts or loans from family.

The median down payment for first-time buyers was 8%, the highest since 1997. For repeat buyers, it was 19%, marking the highest level since 2005. High home prices and mortgage rates made saving for a down payment the most significant challenge for 38% of buyers.

Seller Confessions: Why and How They Sold

The confessions of 2023 home buyers and sellers also include revealing insights from sellers. The typical seller was 60 years old and had lived in their home for 10 years before deciding to sell. The top reasons for selling were:

1. Desire to live closer to family and friends (23%)
2. Home was too small (13%)
3. Change in family situation, such as divorce or new marriage (10%)

Notably, many older sellers did not downsize—many bought a home the same size or larger. This contradicts the expectation that retirees or empty nesters automatically move to smaller properties.

How Did Sellers Perform in 2023?

Sellers saw strong results, with homes selling at a median of 100% of their asking price. Despite shifting market conditions, 92% of sellers were at least somewhat satisfied with their selling process. The median time on the market was just two weeks, indicating that well-priced homes still attracted buyers quickly.

For Sale By Owner (FSBO) Trends

FSBO transactions hit an all-time low of just 7%, with 57% of these sellers knowing the buyer personally. Additionally, FSBO homes sold for significantly less—a median of $310,000 compared to $405,000 for agent-assisted sales. This massive gap reinforces the value of professional real estate representation in maximizing seller profits.

The Role of Real Estate Agents

Real estate professionals played a crucial role in both buying and selling transactions. 89% of buyers and 89% of sellers worked with an agent, demonstrating the continued reliance on professional expertise. Among sellers, 65% found their agent through a referral or had worked with them before, highlighting the importance of building lasting client relationships.

Additionally, 81% of sellers only interviewed one agent before making their choice, reinforcing the power of personal referrals and reputation.

Final Takeaways

The confessions of 2023 home buyers and sellers reflect a market influenced by affordability concerns, changing demographics, and evolving buyer expectations. While online tools are critical in the home search process, buyers and sellers continue to depend on real estate agents for guidance. Market trends suggest that successful agents will focus on referrals, expertise, and adaptability to thrive in 2024 and beyond.

Understanding these trends allows real estate professionals to refine their strategies and better serve clients in a shifting market. Whether buying or selling, staying informed about these key insights ensures success in today’s real estate landscape.