With the decades of attention the Baby
Boomers got vis-à-vis their homebuying habits, and all the worry about the same
lavished on Millennials for the last few years, the two intervening generations,
X and Y, were relatively ignored. Now the National Association of Realtors (NAR)
has released a report evaluating generational differences among recent home
buyers and sellers. NAR divided the
Boomers and Millennials each into older and younger cohorts but seems to have
permanently misplaced Gen Y. That group was apparently absorbed by their Gen X
ancestors, perhaps with a trailing birth year or two swept up with the older
But at least the NAR-defined
Gen X, currently aged 37 to 51, is getting some attention. Their homebuying history and habits are
looked at along with those of younger millennials (ages 26 and under); older
millennials (ages 27-36); younger boomers (ages 52-61); older boomers (ages
62-70); and the Silent Generation (ages 71-91) in NAR's just released Home Buyer and Seller Generational Trends study.
NAR surveyed persons
who purchased a home between July of 2015 and June of
2016 and found, "A growing number of millennials and younger boomer
buyers have children living at home; student debt is common among Gen X and
boomer households; and more millennials are buying outside the city."
NAR's chief economist Lawrence Yun acknowledges
that much of the recent homebuying attention has centered on the challenges
Millennials have faced. Lost in that
discussion, he says, "are the numerous Gen X households who bought their first home, started a family and entered
the middle part of their careers only to be rattled by job losses, falling home
values and overall economic uncertainty during and after the Great Recession."
found that Gen Xers were delayed by debt from buying even longer than were
Millennials and were the most likely generation to have sold a distressed
property or to have delayed selling because their existing home was
underwater. They were also the
generation with the largest total ($30,000) of student loan debt.
"Gen X sellers' median tenure in
their previous home was 10 years, which puts many of them selling a property
they bought right around the time home values were on the precipice of
declining," said Yun. "Fortunately, the much stronger job market and 41 percent
cumulative rise in home prices since 2011 have helped a growing number build
enough equity to finally sell and trade up to a larger home. More Gen X sellers
are expected this year and are definitely needed to ease the inventory
shortages in much of the country."
Buying by the Gen X cohort rose 2
percentage points to 28 percent this year and was the highest share they have
had since 2014. Millennials were the largest group of recent
buyers for the fourth consecutive year with a 34 percent share, down from 35
percent a year earlier. Baby boomers accounted
for 30 percent of the market, and the Silent Generation for 8 percent.
The survey also revealed how rising
rents in many areas is influencing younger boomers to keep their adult children
in mind when buying a home. They were
the most likely group to purchase a multi-generational home, most frequently
citing as a reason that their younger adult children had either moved back home
or never left.
job market is very healthy for young adults with a college education, but
repaying student debt and dealing with ever-increasing rents on an entry-level
salary are forcing many to either shack-up with several roommates or move back
home," said Yun. "This growing trend of delayed household formation is one of
the main contributors to the nation's low homeownership rate."
debt however appears to be affecting every generation. Millennials were most like to have such debt
(nearly half do) but they typically owed less ($25,000) than the next older
group. Sixteen percent of both older and younger boomers also reported having student
debt with a median balance of $10,000.
debt was named as the largest barrier to saving for a down payment Millennials
were most likely to cite student debt (55 percent), followed by Gen X (29
percent) and younger boomers (9 percent).
student debt also appears to be slowing some current homeowners who went to
graduate school and now can no longer afford to sell and trade up because of
their loans," added Yun. He said an NAR survey last year found student debt is
preventing many from selling a home to buy a new one.
two-thirds of millennial buyers are married, unchanged from recent years, but
what has changed is the size of their families.
In this year's survey, 49 percent of millennial buyers had at least one
child, which is up from 45 percent last year and 43 percent two years earlier. The need for more space at an affordable price
is increasingly pushing this age group out of the city. Only 15 percent of
millennial buyers bought in an urban area, down from 17 percent last year and
21 percent the year before.
Yun said 85 percent of Millennial
buyers viewed their home purchase as a good financial decision, the largest of
any group, pointing out that this this bodes well for strong future demand as
more of the generation settles down with families.
percent of survey respondents said they purchased through a real estate agent
with a slightly higher percentage among Millennials. Only 8 percent of buyers bought
a for-sale-by-owner property, the lowest in the survey history.
NAR survey was mailed to recent home
buyers last summer with respondents given the option to respond by mail or
on-line. Just under 5,500 buyers
responded to the survey