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Real Estate

Alec Bruice: Active Military Homebuyers Purchasing at Younger Ages, Buying Larger Homes

Differences in household demographics and affordable financing options spur homebuying demand for young active-service military members, causing them to significantly outpace the share of non-military homebuyers under the age of 35, according to the National Association of Realtors first-ever Veterans & Active Military Home Buyers and Sellers Profile, which evaluates the differences of recent active-service and veteran home buyers and sellers compared to those who’ve never served.

In the survey, NAR asked the following to determine veteran and active-duty service: “Are you or your spouse or partner currently: 1) an active-duty service member; 2) a veteran; or 3) neither.”

The survey also found that while nearly all veteran and non-military buyers and sellers use an agent, usage is practically universal among active-service military members.

NAR’s survey gathered greater insight into how each population of buyers and sellers differs and is similar to those who have never served in the military.

Of all homebuyers, 18 percent identified as veterans and three percent as active-military. Of all home sellers, 21 percent identified as veterans and one percent as active-military.

The results revealed quite a few contrasts between active-service military buyers and buyers who’ve never served.

At a median age of 34 years old, the typical active-service buyer was a lot younger than non-military buyers (40 years old) and was more likely to be married and have multiple children living in their household. As a result, they typically bought a larger home that cost more than those purchased by both non-military buyers and veterans. 

Lawrence Yun, NAR chief economist, says young active-service buyers (ages 18-35) bought homes at a far greater rate (51 percent) than non-military buyers (34 percent).

“Despite having a lower median income ($76,800), more stable job security and no down payment financing options give aspiring homeowners in the military a deserving advantage over their civilian peers,” Yun said. “Furthermore, their tendencies to marry and raise a family at an earlier age and carry less student debt make buying a home a more desirable and achievable option.”

Veterans Affairs loans, which offer over 100 percent financing for veteran and active-service homebuyers, were the most popular loan type for active-service and veteran buyers, leading to the majority of active-service buyers financing their entire home purchase and veterans putting down a median down payment of 5 percent.

For non-military buyers, the median down payment was 11 percent. 

Yun commented: “Current data shows that VA loans perform remarkably well and are a safe and affordable choice. Their current seriously delinquent and homes in foreclosure rate is 2.78 percent versus 3.44 percent for non-VA loans.” 

A place to call home is often times one of the few constants for the families of the brave men and women defending our country, said NAR President Tom Salomone.

“That’s why it’s so important to ensure that homeownership opportunities and affordable financing options exist for qualified military personnel, veterans and their families,” Salomone said. “Many Realtors are veterans themselves, who understand the unique housing needs of those serving our country. Whether it’s relocating to a completely new area across the country or needing to sell their home in a short timeframe, Realtors are committed to helping active-service members and veterans succeed in their homeownership goals.”

NAR is committed to educating more Realtors about working with current and former military service members through its Military Relocation Professional certification program.

This educational initiative available to Realtors offers insights into finding housing solutions that best suit the needs of current and former military members while taking full advantage of their military benefits. To date, over 6,800 Realtors have earned the certification.

*Taken from the National Association of REALTORS.

Alec Bruice is a licensed real estate broker with Santa Barbara Brokers and the 2016 president of the Santa Barbara Association of Realtors. Contact him at [email protected] or 805.637.5774. The opinions expressed are his own.

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