As buyers move farther away, agents need to be ready for them
NAR’s midyear forecast touched on a variety of trends, highlighting increased moving distances as a notable recent change.
Key points:
- Long-distance movers are more likely to use an agent than local movers.
- They’re also searching online rather than relying on families and friends, which means agents should be on top of their marketing game.
- Looking ahead, NAR economists expect home sales to start bouncing back, but that’s contingent on mortgage rates dropping.
Buyers are willing to move farther to find that perfect home, which impacts how they think about real estate agents and online shopping tools.
That was one of the key takeaways from the National Association of Realtors' virtual Real Estate Forecast Summit held on Aug. 2.
While NAR's chief economist Lawrence Yun and deputy chief economist Jessica Lautz touched on a wide range of topics, buyers' willingness to move farther from their current residence marked a significant change in the past year. According to NAR research, the median number of miles people moved in 2022 was 50; from 1989-2021, it was just 10-15 miles.
For repeat buyers, the distance was even greater at 90 miles, while a quarter of all homebuyers moved more than 470 miles.
Lautz said it's also important to note that those moving a longer distance are more likely to use an agent than in-town movers, and they're more likely to look for that agent online rather than getting a referral from family or friends.
"So making sure that you have all your online website information up to date is incredibly important," Lautz said.
As people shop for homes far from their current residence, technology has become more important to the homebuying process. For example, prospective buyers are more willing to purchase a home without physically stepping inside it first, relying instead on real estate agents, virtual tours and online floor plans to help them find the right home.
"If you're moving nearly 500 miles there's maybe not that opportunity to jump in the car and drive several hours… to see that home before it is under contract," Lautz said.
What to expect for the rest of the year
Mortgage interest rates will continue to be a key factor in determining the direction of real estate activity over the remainder of the year, Yun said. He expects interest rates to go down in the coming months, although the recent downgrade in the U.S. credit rating may create a short-term hiccup.
Yun pointed to several economic factors that support the idea of mortgage rates trending down, including an anticipated softening of rent (which would lower inflation) and a pause in interest rate hikes by the Fed. The lagging effect of previous hikes will also further cool down the economy.
Even as the economy cools, the pent-up demand for homes will mean stronger sales as mortgage rates drop, Yun said.
"Right now we are essentially bottoming out in home sales before an anticipated return," Yun noted.