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Realtor® Study Finds First-Time Home Buyers Able to Gain Some Footing in Massachusetts as Home Prices Reach Record Highs in 2017

by Eric Berman - - 781-839-5507 | Feb 08, 2018

WALTHAM, Mass. – February 4, 2018 – The share of first-time homebuyers in Massachusetts last year rose to 42 percent in 2017 despite record high home prices and dwindling inventory, according to the 2017 Massachusetts Profile of Home Buyers and Sellers. This increase is up from a record low of 35 percent in 2016. First-time buyers made up 34 percent of all home buyers nationally, setting Massachusetts above the national level despite ongoing market conditions in the Commonwealth that usually make the home buying process difficult for this population. 

"The Massachusetts housing market saw record high prices and record low inventory in 2017—not the ideal setting in which to buy your first home," said 2018 MAR President Rita Coffey, general manager at CENTURY 21 Tullish & Clancy in Weymouth. "The fact that first-time buyers were still able to make up a sizable portion of buyers last year is a testament to the fact that Massachusetts is a highly desirable place to live, work and raise a family. Still, we need more workforce housing to keep up with this demand if we want to maintain that reputation."  

The state’s share of first time homebuyers fared better than the Midwest (36%), South (30%) and West (33%) regions of the United States, but slightly worse than the Northeast as a whole, which had a total share of 44 percent of first-timers in 2017. 

Working with a Real Estate Professional: 
Ninety-two percent of Bay State residents consulted a real estate broker when buying a home in 2017. Nationally, the number of buyers who have worked with a real estate professional was 86 percent. This is a slight decrease from the high in 2011-2012, when 89 percent of buyers used an agent. As the complexity of the home purchase process has increased, so has the use of buyer agents, which has grown from 69 percent in 2001. The percentage of buyers using an agent has been above the 80 percent mark since 2010 as the number of buyers purchasing directly from a previous owner or through a builder falls. 

“As the home buying and selling process becomes more complicated, it is encouraging to see more Massachusetts residents engaging the expertise of a real estate professional with likely the biggest transaction they'll make in a lifetime,” said Coffey. 

When it comes to selling a home, sellers in Massachusetts worked with a real estate agent 92 percent of the time. Nationally, the rate was 89 percent for sellers. The survey also found that 16 percent of sellers in the Bay State had to delay the sale of their home because the value of their home was worth less than their mortgage. The national number was nine percent. 

The number of Massachusetts sellers who chose to sell their home without an agent or “For-Sale-By-Owner” (FSBO) was three percent (down from 10 percent) and eight percent nationally. Of these, 41 percent of FSBO sellers nationally knew the buyer prior to the sale.    

Buyer/Seller Demographics: 
The median household income of buyers was up to $101,700 compared to $88,800 national median income. Fifty-four percent of homebuyers were married couples, 17 percent single females, eight percent single males, and 18 percent unmarried couples. Nationally, 73 percent of buyers were married, 11 percent were single females, 10 percent were single males, and six percent were unmarried couples. 

The median age of the first-time homebuyer in Massachusetts was 41, compared to 45 nationally. Fifty-nine percent of first-time homebuyers in the state were between 25 and 34 years old, while 22 percent were 35-44 years and one percent were 18-24 years. First-time homebuyers in Massachusetts had a median income of $86,300 compared to $75,000 among first-time homebuyers nationally. 

The median age of the home seller was 50 years and they had a median income of $120,000 (the US median was $103,300).  The typical seller owned their home for 10 years. Twenty-six percent of home sellers reported the main reason for deciding to sell was the home was too small. Another 17 percent cited a change in the family situation, while 13 percent reported that their home was too large. Three percent reported selling their house because they could not afford the mortgage and other expenses of owning a home.  

Financing/Selling Prices: 
In 2017, 92 percent of buyers in Massachusetts financed their home purchase (Ninety-eight percent of first-time buyers compared to 88 percent of repeat buyers). Savings continues to be the chief source of the down payment for 68 percent. Of those first-time homebuyers whose saving for a down payment was delayed, 53 percent cited student loans compared to 55 percent nationally.  

Forty-one percent of buyers felt that the mortgage application process was either “much more difficult than expected” (13 percent) or “somewhat more difficult than expected” (28 percent). Forty-one percent of buyers felt the mortgage application process was “not difficult/no more difficult than expected” and 18 percent felt it was “easier than expected.” 

On the sellers front, in 2017, 58 percent of home sellers did not reduce their asking price before the home was sold.  Only 22 percent of sellers offered incentives to attract buyers compared to 37 percent nationally.  Most often that assistance was applied to closing costs and credit toward remodeling or repairs.  

About the Massachusetts Association of Realtors®: 
Organized in 1924, the Massachusetts Association of Realtors® is a professional trade organization with more than 24,000 members. The term Realtor® is registered as the exclusive designation of members of the National Association of Realtors® who subscribe to a strict code of ethics and enjoy continuing education programs. 

About the data:
The data is from the 2017 Massachusetts Profile of Home Buyers & Sellers, which is compiled annually by the National Association of Realtors® (NAR) on behalf of the Massachusetts Association of Realtors® (MAR). 



Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.