Over time, it is only natural that the market shifts and adapts to the needs and desires of successive generations. By generations of home buyers and sellers, we are referring to a generalized grouping of people, or cohorts, born around the same time. For instance, they are often referred to by nicknames like Boomers, Gen X, and Millennials, etc. As each generation evolves, the markets also react to changes in preferences, shifts in purchasing power, and behaviors, with real estate being no exception. In this article, we will be diving into how the real estate market is being shaped by each of the generations and what to keep in mind in the years to come.
Age of Generations
Before going into the similarities and what makes each generation unique, it is important to have a clear idea of the age ranges these generations describe. While you will often find some interpretations of generations shifting a year or two in one direction or another, the following is the generally accepted scale, plus or minus a year or two.
- Lost Generation: 1883-1990 (98 and Up)
- Silent Generation: 1925-1945 (Ages 76-97)
- Boomers: 1946 – 1964 (Ages 57 – 75)
- Gen X: 1965 – 1979 (Ages 42 – 56)
- Millennials: 1980 – 1998 (Ages 23 – 41)
- Gen Z: 1999 – 2011 (Ages 11 – 22)
- Generation Alpha: 2012 – Present (Ages 0 – 10)
Another important consideration when observing generations is that the Boomer and Millennial generations are the biggest cohorts by population, and as such, it is common practice to observe both groups into separate cohorts, often referred to as Older Boomers, Younger Boomers, Older Millennials, and Younger Millennials.
The Average Home Buyer and Seller in 2022
According to the National Association of Realtors (NAR), each generation has different needs when they are searching for their ideal homes. Of course, there will always be exceptions to the norm. In the following, we will breakdown what the average home buyer and seller looks like by generation.
Gen Z Home Buyers and Sellers
Gen Z home buyers are just making their way into the market, with the total number of buyers and sellers representing less than 2% combined. Compared to all of the other generations, Gen Z represents the 3rd largest cohort by population. While the overall buying numbers for this generation are currently low, early research conducted by the National Association of Realtors indicates that home ownership is important to this group, and will likely see an increase in home purchases from this cohort in the next 5 to 10 years.
Gen Z also represented 2% of all home sellers, which is a bit surprising considering most of their generation is not in their prime selling years. Perhaps unsurprisingly, this group represented the largest group of first-time sellers. The reason most of Gen Z sold their homes was because their homes were too small.
Millennial Home Buyers and Sellers
The next generation up is Millennials, who currently represent 43% of all home buyers in the market, with over 60% of that percentage being comprised of buyers that are Older Millennials. The research seems to indicate that this number is likely to grow over time, as the Younger Millennials come closer to their prime home-buying years. Currently, Millennials represent the largest share of home buyers, which has remained the case since 2014. A majority of this generation of buyers were first-time home buyers, represented the highest share of married couples, and were the most educated age group. Some of the most important considerations for these home buyers were being in close proximity to their work and lowering their overall commuting costs.
By percentage, Millennials represented 26% of all home sellers. Compared to all cohorts, they were the most likely to be married with one or more children living in their household. Second to Gen Z, Millennials were the second largest group of first-time sellers. Interestingly, most Millennials that sold their houses, and bought another house in the same state within about 12 to 15 miles from their previous home. Their primary reason for selling was that their house was too small, which was followed by a change in their family situation (i.e., getting married, having a baby, etc.). They were also the most likely to sell due to relocating to a new job or to being in a more desirable neighborhood.
Gen X Home Buyers and Sellers
Gen X, although a statistically smaller cohort by population, still accounted for 22% of all recent home purchases. Compared to all other cohorts, Gen X currently has the highest median income as of 2020, and are buying the most expensive homes when looking at the median housing price. Like Millennials, they also represent one of the higher shares of married couples and dual incomes. One of the primary drivers for this generation choosing to purchase a new home was work-related or relocating for a new career. Gen X was also the most determined of the cohorts to purchase a multi-generational home to stay in for a while, so they can care for their parents and children.
With 24% of all homes sold, Gen X was the second largest group of home sellers. These sellers were more than twice as likely to be repeat sellers than first-time sellers, but still the third largest group of first-time home sellers. Like Millennials, Gen X typically bought a new house in the same state within 15 miles of the house they just sold. This age group was the most likely to move due to a job relocation, and the most likely to have two or more children living in their household.
Boomer Home Buyers and Sellers
Boomers, who represent the second largest cohort by population, accounted for 28% of all recent home purchases. Reasons for purchasing, however, varied much more than the other generations, ranging from wanting to be closer to friends and family, retirement reasons, or a desire to have a smaller home with less maintenance. Boomers were much more likely than any other generation to relocate to a small, rural town, and they are expected to stay for at least 20 years. Additionally, Boomer buyers were the most likely to move the furthest, with the average distance ranging from 28 – 35 miles away from their previous residences.
When it came to home sales, the Boomers were booming. This group accounted for almost half of all home sales at 47%. This group had the highest number of single female sellers and the highest number of households with no children. Boomers represented the largest group of repeat sellers. When compared to other generations, Boomers were the most likely to sell their homes and relocate out of state, citing their top reasons for selling as wanting to be closer to friends and family or because their home was too large. The Baby Boomers also moved two to three times further away from the homes they sold then any other group.
Silent Generation Home Buyers and Sellers
The Silent Generation, buyers ages 76 to 96 represented the second smallest share of home buyers at 4%, just ahead of Gen Z. A majority of these home buyers are in retirement, have the lowest median household incomes, and purchased the smallest homes on average. Like Boomers, they were more likely to buy a home that brought them closer to friends and family. Another added reason for buying a home was to be in closer proximity to health facilities. 28% of all home purchases by the Silent Generation were in senior housing. This group was also the most likely to purchase a new construction, with 20% of their purchases focused on new homes. Almost half of all home purchases by this generation were military veterans and had the shortest average search length when it came to buying a home.
The Silent Generation was 6% more likely than any other generation to sell their home and not buy another. Overall, this group represented the second smallest group of home sellers, just 4% above Gen Z. If someone from the Silent Generation sold their home, they were more likely to be living alone and without any children compared to every other age group. They represented the largest group of repeat sellers, with 90% of all sellers in the Silent Generation not selling for the first time. The primary reasons for this generation’s relocation were to be closer to family and friends, as well as to downsize into something more manageable. Of all generations, they were the 2nd least likely to stay in the state after they sold their home, and they moved almost as far as their Boomer counterparts.
Lost Generation Home Buyers and Sellers
There is too few data points on buyers of the Lost Generation to determine any meaningful statistics, but this generation still represented about 1% of all home purchases in the United States. According to the 2019 United States Census Bureau report, this generation represents about 1.8% of the total population. Since there was not enough data collected from this generation to infer any preferences, it is not possible to determine their primary reasons or motivations for buying, but perhaps looking at the previous two generational trends might suggest it was likely to be around friends and family. This is also likely the case for sellers of this generation too.
- Each generation of home buyers and sellers have unique preferences
- Gen Z is just getting started on their home-buying journey, which is expected to accelerate over the next 5 to 10 years
- Many Millennials are buying their first homes, and some their second, citing a home that was too small
- With the highest household incomes, Gen X are looking to buy their “forever” multi-generational homes at this stage in their lives
- Baby Boomers account for the largest share of real estate sellers, are looking to move closer to family and friends
- The Silent Generation wants to be closer to quality health facilities, family, and friends too
Regardless of your birth year or generation, Stephen White’s years of real estate experience have helped all generations of home buyers and sellers navigate the market for each unique and individual need they may have. If you’re ready or thinking about buying or selling a home, or maybe both, then Stephen White and his team are ready to assist you. Contact Stephen and his team to get started or learn more.