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Largest Share of Buyers Purchased Homes in Suburbs, Rural Areas

The share of millennial home buyers increased significantly over the past year, according to the latest study from the National Association of Realtors 2022 Home Buyer and Seller Generational Trends report.

The NAR report found that the combined share of younger and older millennial buyers rose to 43% in 2021–up from 37% in 2021. Approximately 65% of younger millennials found the home they ultimately purchased on the internet, a number that gradually decreases with older generations.

All generations of buyers agreed using an agent alleviated anxiety about finding the right home to purchase, as well as providing a resource for them to lean on during the negotiation process. Some 87% of all buyers purchased their home through an agent, although numbers were highest among younger millennials.

"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," said Jessica Lautz, NAR's VP of Demographics and Behavioral Insights. "While young buyers use new tech tools, they also use real estate agents at higher rates than other buyers to help find the right home and negotiate the terms of the transaction."

Generation X had the highest median household income of all generations at $125,000. They bought the most expensive and second-largest homes at a median price of $320,000, and an average size of 2,300 square feet. Older millennials purchased the largest homes at 2,400 square feet, and the silent generation bought the smallest at 1,800 square feet. Across all generations, the largest share of buyers purchased in suburban areas and small towns.

Three out of five of recent buyers were married couples, 19% were single females, 9% were single males, and 9% were unmarried couples. The highest share of unmarried couples were younger millennials at 21%. Single-female buyers significantly outnumbered single-male buyers across all generations. The highest percentage of single-female buyers was in the silent generation at 27%.

The study also found that first-time home buying among younger generations is on the rise, with 81% of younger millennial homebuyers purchasing for the first time. Just under half of older millennial buyers were first-time buyers at 48%.

"While the pandemic allowed many potential buyers to save for a down payment, demographics played a key role," Lautz said. "There is a wave of millennial buyers who are aging into the traditional first-time buyer age range." Boomers made up the largest share of home sellers at 42%, although the percentage of millennial sellers is on the rise, increasing from 22% to 26% over the past year. Lautz noted that for the first time it is now more likely for an older millennial to be a first-time seller than a first-time buyer”

Data also found that younger generations were likely to move shorter distances when relocating. Among all ages, there was a median of 15 miles from the homes where recent buyers previously resided and the homes that they purchased.

Debt continues to be a significant barrier for many when attempting to buy a home. 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%, with a median amount of $28,000. Approximately 27% percent of younger millennials cited that saving for a down payment was the most challenging step in the home buying process, compared to just 1% for older boomers. Nearly 30% of younger millennials received down payment help in the form of a gift or loan from a friend or relative and 24% lived with friends or family, directly saving on rental costs.

"A truth across all generations is that homeownership is seen as a cornerstone of the American dream," said NAR President Leslie Rouda Smith, a Realtor from Plano, Texas, and a Broker Associate at Dave Perry-Miller Real Estate in Dallas. "From building personal wealth and fostering communities, to strengthening social stability and driving the national economy, the value of homeownership is indisputable. Home buyers continue to turn to Realtors as a trusted resource for helping find the right home and successfully navigating this increasingly complex process."

Overall, buyers expected to live in their homes for 12 years, down from 15 years from 2021. For younger millennials and the silent generation, the expected duration was only 10 years, compared to 20 years for younger boomers.

To read the full report, click here.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport, with more than six years of writing experience. She has served as Editor-in-Chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington. She has covered events such as the Byron Nelson, Pac-12 Conferences, the Women in Dallas Film Festival, to freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, she is an avid jazz lover and reader. She can be reached at [email protected]
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