Generational Differences Drive Housing Preferences?
March 12, 2014
Younger home buyers tend to view their home as a strong investment, more so than older buyers who tend to view their homes as a match to their lifestyle, according to the 2014 NAR Home Buyer and Seller Generational Trends study, based on a survey of more than 8,700 responses from buyers and sellers.
The survey provided an in-depth look at the generational differences of recent home buyers and sellers.
The largest group of recent buyers is millennials, those under the age of 34, who comprised 31 percent of recent home purchases, according to the NAR survey. Generation X buyers, born between 1965 and 1979, accounted for 30 percent of recent purchases, and younger boomers, born between 1955 and 1964, accounted for 16 percent.
“Given that millennials are the largest generation in history after the baby boomers, it means there is a potential for strong underlying demand,” says Lawrence Yun, NAR’s chief economist. “Moreover, their aspiration and the long-term investment aspect to owning a home remain solid among young people. However, the challenges of tight credit, limited inventory, eroding affordability, and high debt loads have limited the capacity of young people to own.”
The median age of millennial home buyers is 29 and the median income is $73,600, according to the NAR study. They typically purchased an 1,800-square-foot home costing about $180,000.
In comparison, gen X buyers' median age is 40 and median income is $98,200, and they tend to purchase a 2,130-square-foot home costing $250,000.
Among some of the study's other findings:
- 87 percent of buyers age 33 and younger consider their home purchase a good financial investment compared to 74 percent of buyers 68 and older.
- Millennials were more likely to buy in an urban or central city area than older boomers.
- Younger buyers tended to place higher importance on commuting costs than older generations. Older generations tended to place more emphasis on energy efficiency, landscaping, and community features.
- Millennials plan to stay in the home for 10 years while the baby boom generation plan to stay for 20 years.
- Younger buyers tend to move to larger, higher-priced homes, but “there is a clear trend of downsizing to smaller homes among both younger and older baby boomers and the Silent Generation (those born between 1925 and 1945),” according to the study.
Updated: November 20, 2018