The National Association of REALTORS® (NAR) Research Division conducts a yearly survey of recent home buyers and sellers. I found this portion of the NAR’s annual trend report regarding the generational breakdown of home buyers very interesting. Following are numbers as well as insights into differences and similarities across generations in the past year:
Millennials & Gen Yers (born 1977-1994)
One consistent finding for the last four years of reports has been that buyers 36 years and younger is the largest share of home buyers at 34 percent (down from 35 percent last year). Sixty-six percent of these buyers were also first-time home buyers. The largest cohort in America is growing up and becoming more traditional in their buying habits. This year’s report saw an increased share who purchased in suburban locations and who purchased detached single-family homes. Forty-nine percent of buyers 36 years and younger now have children under the age of 18 in their home, 66 percent are married couples, and 13 percent are unmarried couples (the largest share of all generations).
Gen Xers (born 1966-1976)
Buyers 37 to 51 consists of 28 percent of recent home buyers. They are consistent with their buying trends and demographics. Notably, they are also the most racially and ethnically diverse population of home buyers, with 21 percent identifying they are a race other than White/Caucasian. Buyers 37 to 51 are in their peak earning years and thus their incomes are the highest among all generations of buyer types at $106,600. They are both the generation most likely to be married and most likely to have children under the age of 18 in their home. Their housing preferences are driven by these demographics. Buyers 37 to 51 have the highest median priced homes of all other buyers and buy the largest homes in median square footage and bedrooms. Their neighborhood choices are driven by their convenience to job, but also the quality and convenience of school districts.
Baby Boomers (born 1946-1965)
For the report, buyers 52 to 61 (Younger Baby Boomers) and buyers 62 to 70 (Older Baby Boomers) were broken into two separate categories as they have differing demographics and buying behaviors. Buyers 52 to 61 consist of 16 percent of recent buyers and buyers 62 to 70 consist of 14 percent of recent buyers. Buyers 52 to 61 have higher median household incomes and are more likely to have children under the age of 18 in their home. Buyers 52 to 61 are also more likely to buy a multi-generational home. As the sandwich generation, they are nearly equally likely to buy this type of home for both children over 18 living at home and care taking for aging parents. Buyers 52 to 61 buy for an array of reasons such as a job-relocation, desire for a smaller home, and the desire to be closer to friends and family. Buyers 52 to 61 also project the length of time they will live in their home is the longest at 20 years. Buyers 62 to 70 are often moving due to retirement, desire to be closer to friends and family, and desire for a smaller home. Buyers 62 to 70 typically move the longest distance at a median of 25 miles and are least likely to make compromises on their home purchase.
The Silent Generation (born 1920s-1945)
Buyers 71 to 91 represents the smallest share of buyers at eight percent. As most of these buyers are likely to have retired or scaled back their work demands, they have the lowest median household incomes. The primary reasons to purchase are the desire to be closer to friends and family, the desire for a smaller home, and for retirement. Buyers 71 to 91 are least likely to purchase a detached single-family home. Twenty-four percent purchased in senior-related housing and they tend to purchase the newest homes.
Buyers are Using an Expert Across the Board!
Eighty-eight percent of all buyers purchased their home through an agent, as did 92 percent of buyers 36 years and younger, 88 percent of buyers 37 to 51, and 87 percent of buyers 52 to 61 years. Ten percent of buyers 71 and older purchased their homes directly from the previous owner.
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