Homebuyers Income Rises in 2023

Homebuyers were forced to make more money as mortgage rates rose along with home prices, according to the National Association of Realtors’ 2023 Profile of Home Buyers and Sellers.

  • The median household income for home buyers jumped to $107,000 in 2023, up from $88,000 last year and just the second time the number crossed into six figures.

First Timer. First-time buyers made up 32%, up from last year’s 26% but still well below the 38% average over the last 42 years.

  • 60% of first-time buyers said the primary reason for purchasing a home was the desire to own a home of their own. This number fell to 26% for overall buyers.

What Matters. 60% of homebuyers cited quality of the neighborhood as the most important factor determining the location. Convenience to friends and family and overall affordability of homes were cited at 45% and 39%, respectively.

  • The median distance between the home that recent buyers purchased and the home they moved from was 20 miles, down from 50 miles last year but is a reversion back towards the previously held norm of 15 miles.

More Financing & More Money Down. Eighty percent of buyers financed their home purchase, up slightly from 78% last year but still down from 87% two years ago.

  • The typical down payment for first-time buyers was 8%, which is the highest since 1997. The typical down payment for repeat buyers was 19%, the highest since 2005.

Analysis. Jessica Lautz, NAR deputy chief economist, noted that cash/wealth are still king. “In a still-competitive housing market, more well-off home buyers were able to have their bids accepted by offering larger down payments and even by paying cash.”