Generational study offers homebuyer insightsby Marcie Geffner
Despite challenges posed by debt, down payment and credit score requirements, people of all generations, from Millennials to the Silent Generation, continue to buy houses, though not always for the same reasons.
That’s according to the 2014 National Association of Realtors (NAR) Home Buyer and Seller Generational Trends study, which compared the differences among current generations of homebuyers and sellers.
NAR Chief Economist Lawrence Yun said in a statement that Millennials have entered the peak period in which people typically buy a first home.
“Aspiration and the long-term investment aspect to owning a home remain solid among young people. However, the challenges of tight credit, limited inventory, eroding affordability and high debt loads have limited the capacity of young people to own,” Yun said.
Results of the study
Reasons for buying:
- 80 percent of buyers said they expected their home to be a good investment, though buyers aged 33 or younger were significantly more bullish than buyers aged 68 or older.
- Millennials, Gen X and younger Boomers most often cited a desire to own their own home as a reason to buy. Older Boomers more often cited retirement. The Silent Generation most often wanted to live closer to family or friends.
- Millennials, sometimes called Gen Y or Generation Next, comprised 31 percent of recent buyers. Gen X made up 30 percent; younger Boomers, 16 percent; older Boomers, 14 percent and the Silent Generation 9 percent.
- The median age of Millennial buyers was 29. Their median income in 2012 was $73,600, and they typically bought an 1,800-square-foot home that cost $180,000. The typical Gen X buyer was 40 years old, had a median income in 2012 of $98,200, and purchased a 2,130-square-foot home that cost $250,000.
- 14 percent of home purchases were made by a multi-generational household of adult siblings, adult children, parents and/or grandparents. Twenty-two percent of younger Boomers identified themselves as a multi-generational household.
They want what they want:
- Younger buyers valued lower commuting costs. Older generations wanted energy efficiency, landscaping and community features.
- Younger buyers typically moved to a larger, more costly home while Baby Boomers and the Silent Generation more often moved to a smaller home.
- Younger buyers moved a median distance of 10 miles from their previous residence. Older Boomers moved a median distance of 20 miles. The Silent Generation moved a median distance of 30 miles.
- 12 percent of buyers said they’d delayed their purchase due to other debts.
- Nearly 90 percent of buyers obtained financing, but all-cash purchases increased with age. Forty-five percent of Silent Generation buyers paid all cash.