According to the National Association of Realtors® (NAR), the number of millennial homebuyers significantly increased over the last year! NAR is the largest trade association in the United States representing more than 1.5 million members of the residential and commercial real estate industries. In the 2022 Home Buyer and Seller Generational Trends Report, NAR studied the differences and similarities between buyers and sellers in the current market across several generations.
The report details that the number of younger and older millennial buyers increased by 6% in the last year. Other notable takeaways from the report include that every two out of three millennials, also known as Generation Y, found their new home on the internet and 87% of all buyers purchased their property through an agent, a number that decreases with older generations.
“Some young adults have used the pandemic to their financial advantage by paying down debt and cutting the cost of rent by moving in with family,” Jessica Lautz, NAR vice president of demographics and behavioral insights, said. “They are now jumping headfirst into homeownership. While young buyers use new tech tools, they also use real estate agents at higher rates than other buyers to help find the right home and negotiate the terms of the transaction.”
When questioned about the purpose of hiring an agent, all buyers agreed that securing professional assistance helped them find the right home for their needs and negotiate the terms of sale and pricing. The silent generation (those aged between 76 and 96) and younger millennials are more likely to secure an agent for paperwork purposes.
With the highest median income of $125,000, Generation X (buyers between the ages of 42 and 56) purchased the priciest and second-largest homes at a median price of $320,000 and an average of 2,300 square feet. Older millennials reportedly bought the biggest homes at 2,400 square feet, with the silent generation downsizing to 1,800 square feet. Across the board, buyer demographics reported greater numbers in suburban areas and small towns, debunking the myth that millennials are flocking to city centers.
“Not surprisingly, younger generations typically upgraded in size and price while older generations purchased more affordable properties,” Lautz said. “The majority of all generations bought single-family homes at higher shares than other housing types, and younger buyers dispelled the myth that they are flocking to city centers. When it comes to location, the suburbs and small towns are the places to buy.”
The 2022 Home Buyer and Seller Generational Trends Report recounted a significant increase in young homebuyers, placing Generation Y at the forefront of today’s market. Four out of every five younger millennial buyers and 48% of older millennial buyers reported purchasing homes for the first time.
Debt continues to be a significant barrier for Generation X and Y, delaying homebuying for up to five years. This setback is the longest reported amongst all age groups with 27% of millennial buyers citing that saving for a down payment is the most challenging step. Contributing to the recent rise in millennials entering the market, 29% of buyers received down payment assistance through a gift or loan and 24% stayed with friends or loved ones to save money.
However, an increase in debt has not prevented Generation Y from looking at homebuying with a positive outlook. In fact, 86% of all buyers reported viewing a home purchase as a good investment, and roughly 89% said they would recommend their agent for future services.
“A truth across all generations is that homeownership is seen as a cornerstone of the American dream,” NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas, said. “From building personal wealth and fostering communities, to strengthening social stability and driving the national economy, the value of homeownership is indisputable. Homebuyers continue to turn to Realtors as a trusted resource for helping find the right home and successfully navigating this increasingly complex process.”
For more information on today’s housing market, receive the latest news on upcoming communities, metro Atlanta events and popular design trends on www.AtlantaRealEstateForum.com.