Home Buyer and Seller Generational Trends

18 Mar

From the National Association of Realtors:

Characteristics of Home Buyers

 Gen Y comprises the largest share of home buyers at 32 percent, which is larger than all Baby
Boomers combined. Younger Boomers comprise 16 percent and Older Boomers comprise 15
percent of recent home buyers. Generation X made up 27 percent of recent buyers and the
Silent Generation has the smallest share of home buyers at 10 percent.

 While the demographics of recent buyers fall mostly in the expected range, income peaks for
ages 35 to 59, and the prevalence of children in the home peaks for buyers 35 to 49.

 Gen Y has the largest share of first-time buyers at 68 percent. The share of first-time buyers
declines as age increases. Among the Silent Generation only three percent of buyers are firsttime

 Thirteen percent of all buyers purchased a multi-generational home, one in which the home
consists of adult children over the age of 18, and/or grandparents residing in the home. This is
most prevalent among Younger Boomers aged 50 to 59, at 21 percent. The most common
reason for this living arrangement among Younger Boomers was children over 18 moving back
into the house (37 percent), followed by health/caretaking of aging parents (21 percent).

 The prior living arrangement varies greatly for recent home buyers. Among those who are 33
and younger, 59 percent rented an apartment, while among those who are older than 50 years
of age and older more than half owned their previous residence.

 Thirty-nine percent of Gen Y buyers primarily purchased a home just for the desire to own a
home of their own. Gen X placed a high importance on owning a home of their own, but many
needed to move for a change in a family situation or a job-related relocation. Older Boomers
are more likely to move for retirement, the desire to be closer to friends, family, and relatives,
and the desire for a smaller home, while Younger Boomers are likely to move for a job-related
relocation and to downsize.

 As age increases among recent home buyers, the rate of owning more than one home also

Financing the Home Purchase

 Overall 88 percent of recent buyers financed their home purchase. Nearly all (97 percent) of
Gen Y buyers financed compared to just 61 percent of Silent Generation buyers.

 When financing the home purchase, younger buyers also financed larger shares—the typical
Gen Y downpayment is seven percent and Gen X is 10 percent compared to 22 percent among
the Silent Generation.

 Buyers have a variety of sources for a downpayment on a home. The source is predominately
savings for younger buyers, while older buyers are more likely than younger buyers to use
proceeds from a sale of a primary residence. Younger buyers are also more likely to use a gift or
loan from a relative or friend.

 Twelve percent of buyers overall cited saving for a downpayment was difficult. Among these
buyers, 50 percent reported credit card debt, 46 percent of buyers reported student loans, and
38 percent car loans was the debt that held them back from saving. This was most common
among Gen Y and Gen X buyers who are most likely to use savings as a downpayment source—
22 percent of Gen Y and 15 percent of Gen X had a difficult time saving. Among this 22 percent
of Gen Y, 54 percent reported student loans held them back from saving. Among the 15 percent
of Gen X, 41 percent found credit card debt held them back from saving.

 Despite record housing affordability, many buyers are still making financial sacrifices. About half
of Gen Y and Gen X buyers made sacrifices. Common sacrifices were cutting spending on luxury
or non-essential items, cutting spending on entertainment, or cutting spending on clothes.

 Younger buyers were considerably more optimistic that their home purchase was a good
financial investment in comparison to older buyers. Eighty-four percent of buyers under 34
considered their purchase a good financial investment compared to 72 percent of buyers 69
years of age and older.

Home Sellers and Their Selling Experience

 Among the generations, Gen X (27 percent) is the largest group who are recent home sellers
followed by both Older Boomers (23 percent) and Younger Boomers (20 percent).

 Gen Y is the largest share of married couples among sellers. The Baby Boomers had the lowest
share of married couples among sellers. Older Boomers have the highest share of single female

 Seventy-five percent of Gen Y sellers are first-time sellers compared to just eight percent of sellers
in the Older Boomer segment and 11 percent of Silent Generation sellers.

 Older buyers tend to move further distances, and are more likely than younger buyers to buy in
other regions and less likely than younger buyers to buy in the same state as the home sold.

 There is a clear trend of moving to larger, higher priced homes for Gen Y and Gen X, moving into
a similar home for Younger Boomers, and downsizing in both square footage and price for Older
Boomers and the Silent Generation.

 The reasons for selling a home vary, however, for younger buyers many want to upgrade to a
larger home or to accommodate job relocation. In comparison, for older buyers many want to
be closer to friends and family and buy a smaller home due to retirement.

 Sixteen percent of sellers wanted to sell their home earlier than they were able to but waited or
stalled because their home was worth less than their mortgage. This is most common among
Gen X (23 percent) sellers. Among Gen Y and Younger Boomer sellers this occurred among 17
percent of sellers.

 Typically, the older the home seller, the longer the tenure in their home has been—this is a factor
in fewer sellers who had to stall the sale of their home. Gen Y typically owned their home for five
years while Older Boomers and the Silent Generation owned their homes for 13 years before


Read the full 2015 survey here:



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