The National Association of Realtors (NAR) recently released a report on millennial home buyers on today’s market. Millennial home buyers have been a hot topic for some time now, as they are, or are quickly, reaching the typical home buying age and taking over the real estate market. With the aging-in of these millennials to the market, comes a shift in dynamics and expectations to meet the needs of this next generation. It’s important to take note of their presence, and patterns, so let’s explore some of NAR’s findings.
Right off the bat, it’s important to note that NAR found millennials now make up 43 percent of home buyers (as of 2021). While Generation X bought the most expensive homes (a median price of $320,000) millennial buyers in the real estate market grew a whopping 37% from 2020. It’s important to note the expectation of accessibility via internet for millennials so that you, as a real estate professional, can strategize accordingly. This report by NAR supported this, stating millennials are the most likely to use the internet to find the home they end up purchasing, and also the most likely to use a realtor. In fact, 65 percent of millennial buyers found the home they ultimately purchased, on the internet and NAR noted a gradual decrease in that percentage with older generations. 87 percent of buyers purchased their hoe through an agent, this number was noted as the highest among millennials, with younger millennials (23-31) at 92 percent, and older millennials (32-41) at 88 percent.
How big were the homes each generation bought?
Generation X had highest media household income ($125,000) and purchased the second-largest homes (2,300 square feet). Meanwhile, older Millennials purchased the largest homes (2,400 square feet) and the silent generation bought the smallest homes (1,800 square feet). Jessica Lautz, NAR’s Vice President of Demographics and Behavioral Insights noted “Not surprisingly, younger generations typically upgraded in size and price while older generations purchased more affordable properties.” Lautz also noted “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.”
What about marriage status?
The highest share of unmarried couples purchasing a home together in the report was among young millennials (the 23-31 age range). While single female buyer notably outnumbered single male buyers across all generations, the highest percent was among the silent generation (27 percent). The study also found first-time buying is rising among younger generations. 81 percent younger millennials purchase a home for the first time and 48 percent of older millennials were first-time buyers.
Sellers vs. Buyers
Boomers made up the largest share of home sellers, 42 percent but millennial sellers are rising, now 26 percent which is up from the previous year’s 22 percent. Lautz noted in the report that “it is now more likely for an older millennial to be a first-time seller than a first-time buyer.”
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