Who needs a spouse to buy a first house? Not too many folks anymore.
According to new research from Zillow, only 40 percent of first-time homebuyers are married today, down from 52 percent in the late ’80s.
Why is this? First, fewer people are getting married in general. Barely half of adults (51 percent) were married in 2011, according to the Census Bureau’s American Community Survey data, compared with 72 percent in 1960. Marriage increasingly is being replaced by cohabitation, single-person households, and other living arrangements (mom and dad’s house!).
They’re also waiting longer to get married—the median age for first marriage is now 27 for women and 29 for men, up from 20 for women and 23 for men back in 1960, according to new Pew Research Center analysis of census data.
This real estate trend is showing up in the Dallas-Fort Worth market. One example: ReMax Realtor Ken Lampton says he has a lot of unmarried professional women buying in the Lakewood and Lower Greenville areas of Dallas.
“They don’t have children, so schools aren’t a concern, and they are willing to buy a smaller house in order to be closer to downtown Dallas,” Lampton said.
First-time homebuyers are also waiting longer to buy their starter homes, renting for six years before buying, compared to 4.4 years back in the late ’80s, the Zillow research shows. The typical first-time homebuyer now is 33 years old, up from 30 years old back then.
That delay often means buyers have more substantial savings, and they can afford more house.
“I have noticed that most first-time buyers have saved 20 percent down,” said Kathy Murray, an Ebby Halliday Realtor in Preston Center. “[I’ve seen] many, many cash buyers in general the past few years buying all sorts of homes.”
The Zillow research also points out that although homeownership is now more affordable than renting on a monthly basis, it still costs considerably more than it used to—particularly after accounting for stagnant wages. According to the Economic Policy Institute, with few exceptions, hourly wages fell or stagnated for workers across the wage spectrum between 2013 and 2014—even for those with a bachelor’s or advanced degree—a continuation of a 35-year trend of broad-based wage stagnation in the United States.
First-time buyers are buying homes worth, on average, $140,328, which is 2.6 times their incomes. In the late ’80s, starter homes cost 1.9 times the median income of a typical first-time buyer.
Why all this focus on first-time buyers? Because they’re a critical rung on the real estate ladder, which typically starts at renting and moves up to bigger and more expensive houses over time. These new buyers purchase the starter homes occupied by more mature families, and allow those people to move up the ladder. Additionally, by moving out of their rentals and becoming homeowners, first-time buyers help ease the demand for rentals, making it easier for those lower on the ladder to get started.
“You have to have all parts of the pyramid, and the first time homebuyers are the base,” Lampton said. “People all the way up the pyramid are slowed if there aren’t enough first-time homebuyers.”