Home Buying and Selling Generational Trends
What are the home buying and selling preferences of each generation? Here is what you need to know about different generations of home buyers and sellers based on recent trends.
Each generation has different real estate needs, priorities, and preferences. Understanding each generation's home buying and selling trends allows realtors to tailor their marketing and sales strategies to assist different age groups.
Housing needs change across generations, and understanding each age group will provide valuable insights for current and future homebuyers. Baby Boomers and Millennials are the driving forces in the real estate market, but based on current trends, Gen Z is set to make waves as they age and start purchasing their first homes.
Meanwhile, Baby Boomers and the Silent Generation are moving closer to family and friends, while millennials are buying larger homes than previous generations and are more likely to move due to a change in family situation.
While each generation has many differences, real estate agents and brokers remain a top resource for home buying and selling and are the most used and prioritized during the home search.
Check out these home buying and selling trends for each generation
1. Generation Z
Generation Z, or Gen Z, refers to people born between 1996 and 2010. This is the generation after millennials but before Generation Alpha. This is the most diverse generation in United States history and is the first generation to grow up with the internet and smartphones.
Most people in this generation have different values than older generations and are concerned with various social issues, including the environment, mental health, healthcare, and race equity. Generation Z is known for its interest in entrepreneurship and wants more flexibility and a better work-life balance.
Only making up 3% of homebuyers and 2% of sellers, Generation Z is just entering homeownership. As this generation looks to purchase starter homes as single or newlyweds, they face many challenges, including rising interest rates and high home prices.
With most of Gen Z facing high student loan debt, it is harder for young adults to save enough money for a down payment. Younger people also tend to have less credit and shorter credit histories, which makes it harder to get a home.
Since Generation Z is likely to be unmarried and have children under age 18 in their homes, most are looking to purchase older homes as starter homes rather than other buyers. They also tend to buy the smallest homes among buyers.
According to Credit Karma, 31% of Gen Z are living with their parents or family members to save money since they struggle to make ends meet. Unfortunately, regardless of age, many Americans have difficulty paying rent today.
Even though it is hard for Gen Z to afford homes now, many are still interested in homeownership and are working towards saving money. The good news is the homeownership rates for Gen Z are higher than they were for Millennials and Generation X when they were the same age.
2. Millennials
A Millennial is anyone born between 1981 and 1996. This is the generation after Generation X, but before Generation Z. Millennials are known for being the first generation to grow up with the Internet and for knowing what life was like before smartphones and social media.
Called "Millennials" for being the first generation to come of age in the new millennium, most Millennials are comfortable with technology, are known for being socially progressive, and tend to prioritize work-life balance and mental health.
Most Millennials came of age and entered the workforce following the 2008 recession, which shaped many Millennials' life choices and financial earnings. Regarding home buying trends, Millennials make up the largest share of homebuyers at 38% compared to other generations.
Younger Millennials aged 25 to 33 make up 17% of homebuyers, and 75% are first-time homebuyers. Older Millennials, ages 34 to 43, make up 21% of the share of homebuyers, and 44% are first-time homebuyers.
Millennials, specifically younger Millennials, are considered the most educated generational group that owns homes, as 80% have at least a bachelor's Degree. Interestingly, Millennials have the highest percentage of married couples looking to buy a house at 66%.
Like Gen Z, Millennials are buying older homes and choosing to renovate them to combat high home prices and rising interest rates. About 24% of younger Millennials buy homes after living with a family member to save money.
When buying a home, Millennials typically prioritize affordability, convenience to work, commute times, energy efficiency, open floor plans, and modern features. They also prefer low-maintenance and easy-to-care-for outdoor spaces.
Millennials are more likely to buy smaller homes with upgraded features and smart home technology than other generations. Homes with older charm and modern upgrades are among the top unexpected Millennial home-buying trends.
3. Generation X
Generation X is anyone born between 1965 and 1980. This is the generation after Baby Boomers but before Millennials. Generation X is known for growing up on the cusp of the internet, smartphones, and social media.
Due to its small size, Generation X is typically described as the "middle child" generation. However, Generation X is best known for being independent, versatile, resourceful, and dependable.
Most Generation X is more direct than other generations and is excellent at maintaining a good work-life balance. They are flexible in the workplace and know how to get things done without the help of technology.
Even though Generation X is aging, they face challenges in retiring comfortably due to the gap between what they have saved and what they will need in retirement. Many Gen Xers say they will need $1,112,183 to retire comfortably and may have to retire later than other generations due to high living costs.
Having experienced multiple recessions as children and young adults, including the 1970s, 1980s, 1990s, and 2008 financial crisis, Gen Xers tend to be more cautious about homebuying decisions.
Generation X makes up 4% of homebuyers, with buyers aged 44 to 58. They are the most likely to purchase multi-generational homes and detached single-family homes.
Considered the generation with the most significant number of high-earning home buyers, Generation X has a median income of $126,900 as of 2023. Not only is Generation X the most racially and ethnically diverse homebuyers, but 58% of this group are married couples and can provide dual incomes to afford a house.
When looking for a home, Gen Xers are looking for friendly communities and family-friendly features. In the midst of raising a family, they want homes with beautiful outdoor spaces, functional layouts, and green features such as energy-efficient appliances and solar panels.
4. Baby Boomers
Baby Boomers are the generation born between 1946 and 1964. Considered the largest generational group in United States history, they refer to people born after World War II, marked by a sharp increase in birth rates across the country.
Most Baby Boomers were raised during economic prosperity, growth, optimism, and social change. They are independent, confident, and have a strong work ethic. They have also experienced a lot, living through the Civil Rights Movement and the Vietnam War.
Broken into two separate categories, people aged 59 to 68 are younger Baby Boomers and people aged 69 to 77 are older Baby Boomers. Regarding home buying and selling trends, younger Baby Boomers make up 19% of recent buyers, while older Baby Boomers make up 12%.
As the largest generation of homebuyers, most Baby Boomers are repeat buyers, meaning they have equity to leverage and can buy the home of their dreams near friends and family.
Purchasing homes for various reasons; most older Baby Boomers want to live closer to family members in retirement, while others want to downsize their homes. As the generation most likely to purchase a home in a small town, Baby Boomers want to live in a safe and peaceful city.
While older Baby Boomers tend to purchase the newest homes on average, with single-story layouts and low maintenance features, younger Baby Boomers tend to move the furthest distance and live in their homes for the longest period.
Baby Boomers remain the largest generation of home sellers at 45%.
5. The Silent Generation
The Silent Generation is anyone born between 1928 and 1945. This generational group precedes the Baby Boomers and is also known as the Traditionalist Generation. Its members are children of the Great Depression and World War II.
Unlike later outspoken and rebellious generations, the Silent Generation is named for its collective cautiousness, passivity, and belief in working with the system rather than changing it.
Considered the smallest generation in recent history due to low birth rates, the Silent Generation is also the oldest generation since most Silents are in their 80s and 90s. Homebuyers in the Silent Generation are aged 78 to 98 and represent one of the smallest percentages of buyers, at only 4%.
Most, if not all, of the Silent Generation have retired from the workforce and are buying homes to be closer to family members and friends. At least 33% of this generation is most likely to purchase senior-related housing in a retirement community.
As the second generation most likely to purchase new construction at 18%, Silents tend to buy homes with convenience and easy access to top-rated healthcare facilities.
Due to their age, the Silent Generation prefers downsizing to smaller homes to save money and enjoy accessible features. They gravitate towards purchasing homes in established neighborhoods with a strong sense of community.
With the smallest share of first-time homebuyers, they are the least likely to compromise their home search and have the shortest home search length of any group, viewing a median of six homes only over eight weeks.
FAQs
What generation is buying the most homes?
According to the latest report from the National Association of Realtors, Millennials have surpassed Baby Boomers to become the largest group of homebuyers, at 38% as of April 2024.
What is the unhappiest generation?
Generation Z is considered the unhappiest generation due to its frequent use of technology and social media, which leads to increased feelings of isolation and loneliness.
Which generation will be the wealthiest?
Generation Z will be the wealthiest and largest generation due to its higher incomes, resulting in more significant spending habits. It is predicted that Generation Z will reach $12 trillion in spending power by 2030.
Methodology
Data from the National Association of Realtors, Yahoo Finance, CNBC, Encylopedia Britannica, and Credit Karma were used to determine home buying and selling trends among different generations.
Home Buying and Selling Generational Trends - Final Thoughts
Real estate is one of the most significant financial purchases someone will make in their lifetime. Learning about each generation's needs in the housing market will lead to more effective interactions between buyers and sellers. As demographics change and people age, so do housing needs, and staying on top of trends will allow you to adapt to the current market.
No matter which generation you may fall under, the experts at Raleigh Realty are ready to help with your buying or selling needs. We are here to answer questions and help you find a home that fits your lifestyle and budget.
