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Millennials now make up the largest segment of American homebuyers, new research from the National Association of Realtors has concluded.
Homebuyers born between 1980 and 1998 now make up 43 percent of the buyer pool, said NAR’s 2022 Home Buyers and Sellers Generational Trends report, released this week. Last year, they were only 37 percent of the buyer pool, NAR said.
Older Millennials born between 1980 and 1989 are also more likely to be a first-time seller than a first-time buyer.
“Some young adults have used the pandemic to their financial advantage by paying down debt and cutting the cost of rent by moving in with family. They are now jumping headfirst into homeownership,” Jessica Lautz, NAR’s vice president of demographics and behavioral insights, said in a statement.
Baby Boomers – born between 1946 and 1964 – make up 29 percent of buyers and 52 percent of sellers.
“Not surprisingly, younger generations typically upgraded in size and price while older generations purchased more affordable properties,” Lautz said.
Almost two out of three younger Millennials – 65 percent – found the home they ultimately purchased on the internet, a number that gradually decreases with older generations. Eighty-seven percent of all buyers purchased their home through an agent. This number was highest with younger Millennials (92 percent) and older Millennials (88 percent).
Brandi Snowden, a senior analyst at NAR, told Banker & Tradesman that this was consistent with younger buyers seeking more assistance and help with a process that was new to them.
Debt continues to be a significant barrier for many when attempting to buy a home, the NAR report said. Both Generation X and younger Boomers delayed purchasing a home for five years due to debt, the longest of all age groups. Younger Millennials had the highest share of student debt at 45 percent, with a median amount of $28,000, and 27 percent said that saving for a down payment was the most challenging step in the home buying process. Nearly one-third of younger Millennials received down payment help in the form of a gift or loan from a friend or relative and 24 percent lived with friends or family, directly saving on rental costs.
