The income of a typical homebuyer in the United States jumped to $107,000 from $88,000 last year, underscoring the increasing income required to buy a home, according to The National Association of Realtors' annual Profile of Home Buyers and Sellers study, which tracked transactions made nationwide between July 2022 and this past June.

The 22% jump was the highest annual increase on record, according to the report, making homeownership much more difficult for those earning the national median income of $75,000. In the San Mateo and Santa Clara counties, recent homebuyers needed a minimum qualifying income of more than $400,000 to purchase a median-priced home, according to data from a California Association of Realtors' housing affordability report released earlier this year.

"Given the erosion of housing affordability due to higher home prices and mortgage rates, the household income for those who successfully purchased homes jumped by nearly $20,000 and topped six figures for only the second time in our records," Jessica Lautz, deputy chief economist and vice president of research for the National Association of Realtors, said. "In a still-competitive housing market, more well-off homebuyers were able to have their bids accepted by offering larger down payments and even by paying cash."

According to the homebuyer report, the typical first-time buyer was 35 years old this year, slightly down from 36 last year, while the typical repeat buyer age fell to 58 years from an all-time high of 59 years.

The typical home seller was 60 years old – unchanged from last year's report. Sellers typically lived in their homes for 10 years before putting them on the market.

Key takeaways from the report:

Homebuyer annual household income is highest on record

• Homebuyers able to purchase a home had higher incomes. The typical buyer had an annual income of $107,000 –- a 22% jump from last year.

• For first-time buyers, who made up 32% of all buyers, household incomes rose nearly $25,000 from the previous year.

More homebuyers put down larger down payments

•The typical down payment for a home was the highest in two decades. For first-time buyers, it was 8%, the highest since 1997 when it was 9%. For repeat buyers, it was 19%, the highest since 2005 when it was 21%.

• First-time buyers relied more on financial assets for down payments, including stocks or bonds (11%), cryptocurrency (2%) and their 401k or pension (9%) and IRA (2%).

• “All-cash buyers, wealthier buyers, and those with higher down payments are dominating the housing market - those buyers are likely to be older,” Lautz said.

Fewer married buyers

• 59% of recent buyers were married couples, 19% were single females, 10% were single males, and 9% were unmarried couples. This is the lowest share of married couples since 2010.

More diverse buyers, older repeat buyers

• By race, 81% of buyers were white/caucasian, 7% Hispanic/Latino, 7% Black, 6% Asian/Pacific Islander and 6% identified as some other race.

• "Homebuyers in the past year were more diverse, both racially and ethnically,” Lautz said. "This shows encouraging signs that the homeownership rate may narrow in the future as more minority buyers enter the market."

• Additionally, 14% of homebuyers purchased a multi-generational home to take care of aging parents, to save money and to accommodate children or relatives over the age of 18 moving back home.

• The top reason to sell was to move closer to friends and family. Some sellers found living with one another was the best way to achieve this.

Location reverting back to pre-pandemic trends

• While the trend to move to small towns and rural areas is still high, more buyers are moving back to suburban areas: 47% in the 2023 report compared to 39% in the 2022 report. This is likely due to CEOs wanting more in-person office time, and higher-income buyers being able to purchase closer to city centers.

More buyers and sellers used real estate agents

• 89% of buyers/sellers used a real estate agent or broker to help with their transaction – compared to 86% the previous year.

• "Buyers wanted an expert to help them find the right home and conduct negotiations. Sellers also relied on real estate agents and brokers to price their home competitively and market it to potential buyers,” Lautz said.

Silicon Valley Association of Realtors (SILVAR) is a professional trade organization representing 5,000 Realtors and affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term Realtor is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of Realtors and who subscribes to its strict Code of Ethics.

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