Millennials take the lead home buying pack
Despite the economic and financial challenges young adults have braved since the recession, the millennial generation represented the largest share of recent buyers, according to the 2015 National Association of Realtors (NAR) Home Buyer and Seller Generational Trends study, which evaluated the generational differences of recent home buyers and sellers.
The survey additionally found that an overwhelming majority of buyers search for homes online and then purchase their home through a real estate agent, with millennials using agents the most.
For the second consecutive year, NAR’s study found that the largest group of recent buyers was the millennial generation, those 34 and younger, who composed 32 percent of all buyers (31 percent in 2013). Generation X, ages 35-49, was closely behind with a 27 percent share.
Millennial buyers represented more than double the amount of younger boomer (ages 50-59) and older boomer (60-68) buyers (at 31 percent). The Silent Generation (ages 69-89) made up 10 percent of buyers in the past year.
Lawrence Yun, NAR chief economist, said the survey highlights the untapped demand for homeownership that exists among young adults.
“Over 80 percent of millennial and Gen X buyers consider their home purchase a good financial investment, and the desire to own a home of their own was the top reason given by millennials for their purchase,” he said. “Fixed monthly payments and the long-term financial stability homeownership can provide are attractive to young adults despite them witnessing the housing downturn and subsequent slow recovery in the early years of their adulthood.”
With millennials entering the peak buying period and expected to soon surpass boomers in total population, Yun said he believes the share of millennial purchases would be higher if not for the numerous obstacles that have slowed their journey to homeownership.
“Many millennials have endured underemployment and subpar wage growth, and rising rents and repaying student debt have made it very difficult to save for a downpayment. For some, even forming households of their own has been a challenge.”
According to the survey (http://www.realtor.org/news-releases/2015/03/nar-generational-survey-millennials-lead-all-buyers-most-likely-to-use-real-estate-agent), 13 percent of all home purchases were by a multi-generational household, consisting of adult siblings, adult children, parents and/or grandparents.
The biggest reasons for a multi-generational purchase were cost savings (24 percent) and adult children moving back into the house (23 percent). Younger boomers represented the largest share of multi-generational buyers at 21 percent, with 37 percent of those saying the primary reason for their purchase was due to adult children moving back into their house.
“Even though the share of first-time buyers has fallen to its lowest level since 19871, young adults in general are more mobile than older households,” Yun added. “The return of first-time buyers to normal levels will eventually take place in upcoming years as those living with their parents are likely to form households of their own first as renters and then eventually as homeowners.”