Have you ever wondered who’s buying homes today? (Maybe only diehard home lending bloggers ask themselves that question!) Despite what you see on popular TV shows, it’s not all home flippers and extreme remodelers. Every era has its stereotypes. In post-World War II America, you might have thought that all homebuyers purchased single-family houses in new suburbs. More recently, you’ve probably seen articles about Millennials that suggest they all live an urban hipster lifestyle. Luckily, we have real information about generational differences (and similarities) that paints a more accurate picture of today’s multigenerational homebuyers.
The National Association of Realtors® (NAR) began publishing the annual Home Buyers and Sellers Generational Trends Report in 2013. The April 2019 report is primarily based on data collected in the 12 months ending June 30, 2018, however income information is based on 2017 data. The lengthy study examines several facets of home buying, selling, and financing. It’s an interesting read for the statistically minded, and provides helpful insights for the casual reader (and curious blogger). It categorizes several home buying characteristics by age group, placing the generations in broad categories:
Silent Generation 73-93
Older Boomers 64-72
Younger Boomers 54-63
Gen X 39-53
Older Millennials 29-38
Younger Millennials/Gen Z 28 and younger
Buyers by generations.
You may have read broad statements that Millennials aren’t buying homes. Not true. They might have waited longer to buy, but Millennials make up 37 percent of homebuyers, the largest percentage in the study. Gen Xers come next at 24 percent. A higher percentage of Boomers are selling than buying, but they still represent a healthy 32 percent of buyers. Not surprisingly, 86 percent of buyers age 28 and younger are first-time homebuyers, followed by 52 percent of buyers age 29 to 38.
Before they bought.
The cliché story that Millennials live in their parents’ basements is not accurate, at least not for those who go on to buy homes. Both older and younger Millennial homebuyers were renting apartments or houses before they bought. Only 14 percent of older Millennial homebuyers lived with parents or friends, and half of them paid rent.
While married couples make up the greatest percentage of homebuyers in all age groups, single females rank next, except in the Millennial category, where unmarried couples occupy the second spot. It will be interesting to see if this trend continues as the population ages. Another interesting development is the purchase of homes for multiple generations. The largest percentage of homebuyers in this category are age 39 to 53 (16 percent), followed closely by those age 54 to 63 (15 percent). The dominant reason for purchasing a multi-generational home is to care for older parents, the primary concern of 26 percent of all buyers.
What they buy.
One thing hasn’t changed since the post-war building boom. The overwhelming majority of homebuyers purchase detached single-family homes. This is true for all ages, including buyers in the 73-93 year age range who might be expected to choose a lower maintenance property like a condo or townhome. 82 percent of all homebuyers choose a detached single-family house. It seems that the American Dream of homeownership is alive and well.