Recent homebuyers are overwhelmingly happy with their purchases, according to a recent survey, but the reasons why depend on the age of the buyer.
Most younger buyers consider their homes strong investments, while older buyers view their new homes as a match to their changing lifestyles — typically choosing a smaller house after their children move out on their own.
These are just a few of the findings in a generational trends study by the National Association of Realtors, based on a survey of more than 8,700 buyers and sellers.
Eight out of 10 recent buyers considered their home purchase a good financial investment, ranging from 87 percent for buyers age 33 and younger to 74 percent for buyers 68 and older.
The largest group of recent buyers are millennials — those under the age of 34 — who accounted for 31 percent of recent home purchases. Generation X buyers, born between 1965 and 1979, made up 30 percent of recent purchases, and younger baby 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,” Lawrence Yun, NAR’s chief economist, said in a statement accompanying the survey results.
“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 homebuyers 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 with a median income of $98,200, and they tended to buy a 2,130-square-foot home costing $250,000.
Other findings from the survey:
- 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 buyers were likely to place more emphasis on energy efficiency, landscaping, and community features.
- Millennials planned to stay in the home for 10 years, while those in the baby boom generation planned to stay for 20 years.
- Younger buyers tended 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.
- Overall, 88 percent of recent buyers financed their home purchase. Nearly all (97 percent) millennials financed, compared with just 55 percent of Silent Generation buyers.
- Among the generations, Gen X (29 percent) is the largest group who are recent home sellers, followed by older boomers (22 percent) and younger boomers (21 percent).
(Image: Flickr/Tony Hoffarth)