Home Buying Trends by Generation - NAR Data Report
The National Association of Realtors® recently released its 2018 Home Buyer and Seller Generational Trends study, which found that home purchases by millennials ticked up over the past year, but inventory constraints and higher housing costs kept their overall activity subdued and prevented some from leaving the more affordable confines of their Gen X and baby boomer parents’ homes.
The survey additionally found that millennial buyers prioritize living close to friends and family over a home’s location and proximity to schools, and an overwhelming majority used a real estate agent to buy or sell a home.
Slightly more than a third of all home purchases were made by millennials over the past year (36 percent; 34 percent in 2017), which kept them as the most active generation of buyers for the fifth consecutive year. Gen X buyers ranked second (26 percent; 28 percent in 2017), followed by younger (18 percent) and older baby boomers (14 percent) and the Silent Generation, those born between 1925 and 1945 (6 percent; 8 percent in 2017).
Other key findings and notable generational trends of buyers and sellers in this year’s 144-page survey include:
Younger boomers and Gen X buyers increasingly have children and parents living at home
Similar to previous years, younger boomers were the most likely to purchase a multi-generational home (20 percent), with a noteworthy rise in those indicating the top reason they did was for their adult children (above 18 years old) to live at home (39 percent; 30 percent in 2017), as well as their parents (22 percent; 18 percent in 2017).
The survey also found a growing share of Gen X buyers buying for multi-generational purposes (15 percent; 12 percent in 2017), with a big jump in the top reason being for their adult children (35 percent; 26 percent in 2017) and parents living with them (30 percent; 19 percent in 2017).
Friends and family matter for buyers both young and old
When deciding where to buy a home, quality of the neighborhood is the factor most influencing buyers of all ages, followed closely by convenience to a job for those up to working age (millennials to younger boomers). Interestingly, even more than the location and quality of a school, recent millennial buyers were just as likely as older boomers and the Silent Generation (at 43 percent) to consider proximity to friends and family.
“The sense of community and wanting friends and family nearby is a major factor for many homebuyers of all ages,” said Yun. “Similar to Gen X buyers who have their parents living at home, millennial buyers with kids may seek the convenience of having family nearby to help raise their family.”
Millennials buying condos in the city at a very low rate
The share of millennial buyers with at least one child continues to grow, at 52 percent in this year’s survey and up from 49 percent a year ago and 43 percent in 2015. With the need for a larger house at an affordable price, over half of millennials bought in a suburban location (52 percent), while also being more likely than Gen Xers and younger boomers to choose a home in a small town. After climbing as high as 21 percent in 2015, only 15 percent of recent millennial buyers purchased a home in an urban area.
Regardless of age, most buyers and sellers work with a real estate agent
Buyers and sellers across all age groups continue to seek the assistance of a real estate agent when buying and selling a home. At 90 percent, millennials were the most likely to purchase a home through a real estate agent, and help understanding the buying process was cited as the top benefit millennials said their agent provided (75 percent). Overall, at least 84 percent in every other generation worked with an agent to close the deal.
On the seller side, Gen X and older boomers were the most likely to use an agent (91 percent), followed closely by millennials (90 percent) and younger boomers (88 percent). The near universal use of an agent to sell a home helped keep for-sale-by-owner transactions at their lowest share ever for the third straight year (8 percent).
The National Association of Realtors® is America's largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.