Generation X is finally on the mend and on the move, especially as home buyers. Young Boomers are buying homes with enough room for their adult children to live with them. Millennials are heading to the suburbs with their kids.
All this was revealed in a recent study by the National Association of Realtors® (NAR), the 2017 Home Buyer and Seller Generational Trends, which evaluates the generational differences of recent home buyers and sellers.
With a 41% cumulative rise in home prices since 2011, an increasingly improving economic outlook and strong job growth, Generation X is finally feeling confident enough to re-enter the purchase market. With a spike in home values came a hike in home equity, allowing Gen Xers to finally consider trading up to a larger home.
As the generational group that suffered perhaps the greatest impact of home value decline, the biggest hit from stagnant job growth and job loss, along with overwhelming student debt during the Great Recession, Gen Xers were staying put and avoiding high mortgage payments while they regained their footing. A 28% increase in home purchases from Gen X buyers this year is the highest since 2014 and higher than 2016, which was 26%. This trend provides some optimism that the housing industry will see a resurge in housing inventory.
Baby boomers comprised 30% of homebuyers according to NAR’s recent report. Interestingly, sky-high rent costs in many U.S. areas and looming student debt are likely the catalysts for many middle-aged parents who include “room for their adult children” on the “must have” list of home features when shopping. In fact, younger boomers ranked as the most likely to be home buyers of a multi-generational home (20%), and the top reason for this was that adult age children had either never left or moved back home (30%).
Not surprisingly, millennials placed as the largest group of recent home buyers for the fourth consecutive year, at 34%. Nearly two-thirds of them are married and 49% have at least one child, an increase over 45% from last year. With more children to consider, the need for more affordably priced living space continues to push millennial buyers outside the city limits. Only 15% of millennial homeowners purchased in an urban area, a decline from 17% last year and 21% two years ago.
Buyers and sellers across all generations continue to value Realtors® as a vital part of their real estate transactions. The recent survey shows almost 90% of respondents said they had worked with a real estate agent to buy or sell a home. This overwhelming majority pushed for-sale-by-owner transactions down to their lowest ever at a mere 8%.
Obviously, digital technology has become invaluable when home shopping. Notably though, while Gen X and millennials homebuyers are the most likely to go online during their search, they are also the most likely to rely on a real estate agent when purchasing their home, with Gen Xers reporting 92% and millennials reporting 88%.