It’s official: Homebuyers, particularly young ones, are now more likely to get information from mobile apps and websites than yard signs and open houses, according to an annual survey released today by the National Association of Realtors.
“While yard signs and open houses have historically been used most frequently after online websites and real estate agents, the use of mobile technology is now outpacing these traditional sources in the home search process,” the 2014 NAR Profile of Home Buyers and Sellers said.
Information sources used in home search, by age
Source: 2014 NAR Profile of Home Buyers and Sellers (click to enlarge).
And while buyers are more likely to find the home they end up purchasing on the Internet than through an agent, the proportion who do so appears to have plateaued. After rising from 8 percent to 40 percent from 2001 through 2011, the percentage of buyers who found their homes on the Internet has remained steady at 43 percent for two years in a row.
Where buyers found the home they purchased
Source: 2014 NAR Profile of Home Buyers and Sellers (click to enlarge).
The survey also found that the proportion of first-time homebuyers dropped to its lowest level in close to three decades.
First-time homebuyers represented 33 percent of homebuyers surveyed, a drop of 5 percentage points from the previous year’s survey and the lowest proportion since 1987 when it stood at 30 percent.
After searching for homes online, the survey found first-time homebuyers were much more likely than repeat buyers to look for information on how to get a mortgage, and to request more information about a home. They were also slightly more like to find the agent that they ultimately used to search for or buy a home.
Actions taken as a result of Internet home search
Source: 2014 NAR Profile of Home Buyers and Sellers (click to enlarge).
NAR sent the 127-question survey out in July and received 6,572 responses. The survey covers owner-occupants and does not include investors or vacation homes.
“Rising rents and repaying student loan debt makes saving for a down payment more difficult, especially for young adults who’ve experienced limited job prospects and flat wage growth since entering the workforce,” NAR Chief Economist Lawrence Yun said in a statement.
The Internet is a slightly more central tool for homebuyers in the home search process than agents, the survey showed. Respondents ranked websites above real estate agents for both the frequency and usefulness in their home search.
In the survey, 88 percent of respondents said they frequently or occasionally used a website to search for a home, edging real estate agents by just one percentage point.
In addition, homebuyers revealed that the Internet was by far their first destination when initiating the homebuying process. Forty-three percent of the survey respondents said their first step in the homebuying process involved searching for properties online. Contacting a real estate agent ranked second, with 15 percent of respondents indicating that as their initial move.
As in last year’s survey, the Internet was the No. 1 tool buyers used to find the house they eventually bought, representing 43 percent of survey respondents. Agents came in at No. 2 at 33 percent.
Use of the Internet didn’t obviate homebuyers and sellers’ use of an agent, however.
“Ninety percent of homebuyers who searched for homes online ended up purchasing their home through an agent,” said NAR President Steve Brown in a statement. “In fact, buyers who used the Internet were more likely to purchase their home through an agent than those who didn’t (67 percent).”
Homebuyers and sellers are using real estate agents at a healthy clip, according to the report. The survey showed that 88 percent of both buyers and sellers used an agent to help them purchase or sell their home.
As in last year’s survey, 9 percent of sellers in the 2014 survey said they sold their home themselves, without the help of an agent.
Of those homebuyers who used the Internet, 54 percent and 51 percent used a mobile device or a mobile search engine, respectively, to search for a home.
Homebuyers ranked photos, detailed property info, interactive maps and virtual tours, in that order, as the most useful website features for home search.
Value of website features
Source: 2014 NAR Profile of Home Buyers and Sellers (click to enlarge).
The Internet also played a slightly more central role for buyers in choosing an agent in this year’s survey compared to last year’s, but personal referrals still dominate.
Ten percent of homebuyers queried in the 2014 survey said they found their agent online compared with 9 percent last year. In addition, a higher proportion of buyers reported they found their agent through an agent referral than last year.
Zillow, Trulia and realtor.com and other real estate tech firms are focused on building products, like well-rounded agent profile pages, to help connect buyers with agents in new ways on the expectation that the Internet will play an increasingly central place in the process in years to come.
On the seller side, the Internet’s prominence in bringing sellers and agents together didn’t change from a year ago. Just 4 percent of sellers reported finding their agent through the Internet in the 2014 survey.