Happy Homeownership Month! Every June, we come together to recognize the importance of owning a home and the countless benefits it brings. Whether you're a first-time home buyer, a seasoned homeowner, or someone contemplating the idea of homeownership, this month is dedicated to exploring the joys, challenges, and rewards of owning your own piece of the American dream.
To commemorate Homeownership Month, we’re going to delve into the latest insights and trends shaping the real estate landscape. The National Association of Realtors has released its 2023 Home Buyers and Sellers Generational Trends Report that unpacks valuable data on the ever-evolving preferences, behaviors, needs, and expectations of home buyers across the nation. By taking a look at the changing dynamics of the housing market, we can gain knowledge on navigating the world of real estate in the year ahead.
meet the buyers
gen z: ages 18-23
younger millennials: ages 24-32
older millennials: ages 33-42
gen x: ages 43-57
younger baby boomers: ages 58-67
older baby boomers: ages 68-76
the silent generation: ages 77-97
Gen Z saw a slight uptick from last year’s NAR data as they made up 4% of recent home buyers. 30% of buyers in this age group moved directly from their family’s home into homeownership while, notably, 49% owned their previous home. Only 21% of home buyers in this generation had been renters prior to purchasing.
For nearly a decade, Millennials held the largest share of buyers. However, that percentage dipped in the past year as the number of Baby Boomers in the buying pool surpassed Millennials. Millennials comprised 28% of all buyers (down from 43% in 2021) and Baby Boomers climbed to 39% of all buyers (up from 29% the previous year).
Millennials are still the majority demographic for first-time home buyers— 70% of Younger Millennials and 46% of Older Millennials who purchased in 2022 became first-time homeowners. Younger Millennials had the highest portion of unmarried couples (20%) and were also the most educated age group with 80% holding at least an associate’s degree. 35% of Younger Millennials have student loan debt with a median of $30,000, while 30% of Older Millennials have student loan debt with a median balance of $40,000.
Gen Xers made up 24% of the buying pool and remained the highest-earning demographic with a median income of $114,300. Gen Xers are also the most racially and ethnically diverse group of buyers with over 20% identifying as a race other than Caucasian, 14% speaking a primary language other than English, and 20% born outside of the US. Gen Xers were the second-highest group for purchasing a multigenerational home (17%).
Older Baby Boomers were the most likely to purchase a multigenerational home (18%) and also leaned toward newer homes compared to other demographics.
The Silent Generation comprised 4% of all buyers. This age group represented the highest portion of military veterans at 41% (matching that of Older Boomers). 12% of the Silent Generation bought senior-related housing and 68% of home buyers in this demographic were married couples.
31% of all buyers had minor children in the household with Older Millennials being the largest share— 70% of the age group had at least 1 child under the age of 18 residing in the home.
motivations for buying + preferences
For Millennials and Gen X, the primary reason for purchasing was simply a desire to own their own home. Baby Boomers and the Silent Generation, who had very small percentages of first-time buyers, listed a desire to be closer to family and friends as the main contributor to their purchase.
Following suit with previous years, the most common property type was a single-family detached home which represented 79% of purchases last year. Out of all buyers, the typical home was 1,800 square feet, built in 1986, with 3 bedrooms and 2 bathrooms. Older Baby Boomers bought newer homes compared to other generations with a median of 1996 for the year the home was built. Gen Xers bought the largest properties with a median square footage of 1,970. Recent buyers expect to live in their home for a median of 15 years— up from 12 years in the 2022 report.
how they searched for homes
96% of buyers searched online for listings and this was typically the first step taken in the home buying process. Over half of all recent home buyers found the property they purchased online. Buyers generally started their home search 3 weeks before contacting an agent. 86% of buyers listed their real estate agent as the most important source of information followed by online searches.
Listing photos were by far the most valuable tool when looking online as 85% of all buyers ranked pictures “very useful.” In fact, pictures and videos are so vital in today’s market that 59% of buyers between the ages of 27 to 41 said they are confident about writing an offer on a property they’ve never seen in person, according to Inman.
Out of all buyers, the median home search lasted 10 weeks. Gen X and the Silent Generation had the shortest search at a median of 8 weeks for both age groups. Buyers typically looked at 5 homes before purchasing.
86% of buyers used a real estate agent while 10% dealt directly with the previous owner. The vast majority of buyers said they would use their Realtor again or recommend them to others.
Analyzing the aspirations and behaviors of home buyers and how trends vary among generations can be beneficial to all. It can help prospective buyers gain a better understanding of the market while giving sellers perspective on how their home compares to the average buyers’ needs. For more specifics on recent home buying trends, view the NAR’s Home Buyers and Sellers Generational Trends Report here.