Baby Boomers Overtake Millennials as Largest Generation of Home Buyers (NAR)

 

Written by National Association of Realtors Posted On Tuesday, 28 March 2023 07:37

The share of baby boomers has surpassed millennials and now makes up the largest generation of home buyers, according to the latest study from the National Association of Realtors^®.

The 2023 Home Buyers and Sellers Generational Trends report, which examines the similarities and differences of recent home buyers and sellers across generations¹, found that the combined share of younger boomer (58 to 67 years old) and older boomer buyers (68 to 76 years old) rose to 39% in 2022, up from 29% the year prior. Younger millennials (24 to 32 years old) and older millennials (33 to 42 years old) have been the top group of buyers since 2014, but they saw their combined share fall from 43% in 2021 to 28% last year.

“Baby boomers have the upper hand in the homebuying market,” said Dr. Jessica Lautz, NAR deputy chief economist and vice president of research. “The majority of them are repeat buyers who have housing equity to propel them into their dream home – be it a place to enjoy retirement or a home near friends and family. They are living healthier and longer and making housing trades later in life.”

Twenty-six percent of all buyers were first-time buyers, the lowest since NAR began tracking the data and a decrease from 34% last year. Seventy percent of younger millennials and 46% of older millennials were first-time buyers. Behind these groups, only 21% of Generation X (43 to 57 years old) and 9% of younger boomers were first-time purchasers.

Generation Z – ages 18 to 23 – now makes up 4% of home buyers, a slight increase from 2% in 2021. Nearly one in three Gen Z buyers – 30% – moved directly from a family member’s home into homeownership. Finding a location convenient to friends and family was most important to this cohort of buyers.

“As the youngest generation of home buyers and sellers, it’s encouraging to see Gen Z entering the market,” Lautz said. “Their desire for homeownership is strong, and many are relying on family support systems to help make their first real estate purchase.”

Generation X made up 24% of total buyers. They had the highest median household income of any generation ($114,300), followed by older millennials ($102,900).

In addition to leading the way in home buying, baby boomers remained the largest home seller generation, jumping from 42% in 2021 to 52% in 2022. Among all generations, sellers typically remained in their home for 10 years before selling, up from nine years last year. On average, younger millennials stayed in their homes for four years, while older boomers sold their homes after 16 years.

All generations agreed that the most common reason to sell was to be closer to friends and family. Older generations were also more likely to sell due to retirement, while younger generations cited the desire for a larger home and job relocation as top reasons to sell their home.  

On average, people are moving farther distances. Overall, buyers moved a median of 50 miles when relocating, the highest ever recorded and up significantly from 15 miles last year. Younger generations moved shorter distances, with younger and older millennials each typically moving 15 miles away. Younger boomers moved the furthest (90 miles), followed by older boomers (60 miles) and the silent generation (50 miles).  

Overall, buyers expected to live in their homes for 15 years, up from 12 years in 2021. For younger millennials, the expected duration was only 10 years, compared to 20 years for younger and older boomers. Surprisingly, Generation Z expected to remain in their newly purchased home for 19 years.

Eighty-six percent of all buyers purchased their homes through a real estate agent. This number was highest among younger boomers (90%) and Generation X (88%). Buyers from all generations agreed about the top reasons for using an agent: they wanted help finding the right home to purchase (49%), negotiating the terms of sale (13%) and negotiating the price (11%). Younger (14%) and older (12%) millennials were most likely to want their agent to help with paperwork.

Eighty-eight percent of all buyers reported that they view a home purchase as a good investment. Seventy-four percent of younger millennials and 77% of older millennials viewed a home as better than or about as good a financial investment as stocks.

Seventy-six percent of buyers said that they would use their agent again or recommend their agent to others, a number that was consistent across all generations.

“Owning a home is more than just a financial investment. It’s a symbol of stability, independence and community that helps people build their lives and achieve their dreams,” said NAR President Kenny Parcell, a Realtor^® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “Whether you’re a first-time home buyer or an experienced investor, Realtors^® have the expertise and knowledge needed to provide valuable advice and help you make informed decisions about your purchase.”

Methodology

NAR mailed a 129-question survey in July 2022 using a random sample weighted to be representative of sales on a geographic basis to 153,045 recent home buyers. Buyers had to have purchased a primary residence home between July 2021 and June 2022. A total of 4,854 responses were received from primary residence buyers. After accounting for undeliverable questionnaires, the survey had an adjusted response rate of 3.2%.

All information in this profile is characteristic of the 12-month period ending June 2022, with the exception of income data, which are reported for 2021. In some sections, comparisons are also given for results obtained in previous surveys. Not all results are directly comparable due to changes in questionnaire design and sample size.

 The National Association of Realtors^® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term Realtor^® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors^® and subscribes to its strict Code of Ethics.

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¹ Survey generational breakdowns: Generation Z: (ages 18-23); younger Generation Y/millennials (ages 24-32); older Generation Y/millennials (ages 33-42); Generation X (ages 43-57); younger boomers (ages 58-67); older boomers (ages 68-76); and the Silent Generation (ages 77-97).