Generational Trends of New Homeowners – A look at Millennial Home Buyers
Millennial Home Buyers are not a myth. They are a huge market group and mortgage companies and real estate agencies need to focus their attention on this cohort.
The National Association of Realtors recently published a research paper on Home Buyer & Seller Generational Trends. This gives us tremendous insight into the characteristics of New Homeowners, which provides us with many marketing opportunities – not only for list selection, but for messaging.
Here are some of the highlights:
- Millennials comprises the largest share of home buyers at 31%. They are followed by Gen X at 30%,and both Younger (16%) and Older Boomers (14%) for a total of 30%. The Silent Generation has the smallest share of home buyers at 9%.While the demographics of recent buyers fall mostly in the expected range, income peaks for ages 34 to 58, and the prevalence of children in the home peaks for buyers 34 to 48.
- Millennial home buyers comprise the largest share of first-time buyers at 76%. The share of first-time buyers declines as age increases. Among the Silent Generation only two percent of buyers are first-time buyers.
- 14% of all buyers purchased a multi-generational home, one in which the home consists of adult children over the age of 18, and/or grandparents residing in the home. This is most common among Younger Boomers aged 49 to 58 at 22%. The most common reason for this living arrangement among Younger Boomers was children over 18 moving back into the house (38%). This is followed by cost savings (18%), and health/care-taking of aging parents (15%).
- The prior living arrangement varies greatly for recent home buyers. Among those who are 33 and younger, 62% rented an apartment and 20% lived with parents, relatives, or friends. Among those who are older than 48 years of age, more than half owned their previous residence.
- About half of Millennial buyers primarily purchased a home just for the desire to own a home of their own. Gen X placed a high importance on owning a home of their own, but many needed a larger home and needed to move for a job-related relocation. Older Boomers and the Silent Generation are more likely to move for retirement, the desire to be closer to friends, family, and relatives, and the desire for a smaller home.
- As age increases among recent home buyers, the rate of owning more than one home also increases
The Study clearly shows that Millennials and First Time Home Buyers are the top responding segments in terms of marketing for new home sales.
Home builders, developers, real estate agents and Mortgage brokers need to reach out to this top-performing group.