Millennials (those aged 23 to 41) make up the largest share of U.S. homebuyers at 43%, up from 37% a year ago, while Baby Boomers (those aged 57 to 75) made up the largest share of home sellers at 42%, according to the National Association of Realtors’ 2022 Generational Trends report released on Wednesday. Millennials have been the largest share of buyers since the 2014 generational trends report.
The report use data from NAR’s Profile of Home Buyers and Sellers report and examines the similarities and differences across generations of homebuyers and sellers.
Generation Z buyers and seller, those aged 18 to 22, made up just 2% of both categories, the same as a year ago. The oldest generation examined, The Silent Generation (those aged 76 to 96), made up 4% of home buyers and 6% of home sellers.
The report found that, while the most common reason for purchasing a home differs from generation to generation, for homebuyers under the age of 57, the main reason was “the desire to own a home of their own,” compared to homebuyers aged 57 and older, whose top reasons for purchasing a home were “the desire to be closer to friends and family” and “the desire for a smaller home.” Regardless of reason for their purchase, 86% of all buyers reported that they thought their home purchase was a good investment.
“A truth across all generations is that homeownership is seen as a cornerstone of the American dream,” NAR president Leslie Rouda Smith said in a statement. “From building personal wealth and fostering communities, to strengthening social stability and driving the national economy, the value of homeownership is indisputable.”
The vast majority (87%) of home buyers financed their home purchase, however the share of buyers who financed their purchase decreases as the age of the buyer increases. A sizable share (29%) of Younger Millennials, however, reported that they also received down payment help in the form of a gift or loan from a friend.
Overall, 34% of millennial buyers were first-time home buyers. Of the Younger Millennials (those aged 23-31) who purchased homes, 81% were first-time buyers, compared to 48% of Older Millennials (those aged 32-41).
Younger Millennials were also the most likely to move directly from a family member’s home before buying their own, with 24% reporting they did this.
“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,” Jessica Lautz, NAR’s vice president of demographics and behavioral insights said in a statement.
The median home purchase price across all generations was $305,000, with Younger Millennials purchasing the most affordable homes with a median purchase price of $250,000.
Generation X buyers (those aged 42-56) made up 22% of homebuyers and had the most expensive median home purchase price at $320,000. These buyers also reported the highest median yearly income, earning $125,000 in 2020.
Older Millennials purchased the largest homes with a median size of 2,400 square feet, while the Silent Generation purchased the smallest homes with a median size of 1,800 square feet.
The majority of all buyers (51%) purchased homes in suburban areas and 20% of all buyers bought homes in small towns. While the median moving distance for all age groups was 15 miles, younger generations tended to report moving shorter distances when relocating. Younger Millennials reported the shortest median moving distance at 10 miles compared to Older Baby Boomers, who reported a median moving distance of 35 miles.
Younger Millennials also expect to live in their homes for the shortest amount of time. They, along with members of the Silent Generation, expect to live in their homes on 10 years, while Younger Baby Boomers expect to live in their homes for 20 years. The average across all generations was 12 years, down from 15 years in the last report.
Nearly two-thirds (65%) of Younger Millennials found the home they bought online. This age group also had the largest share of buyers that reported working with a real estate agent at 92%. Older Millennials were the second largest group to report using an agent at 88%.
Across all generations the top reason for using an agent was that buyers “wanted help finding the right home to purchase, negotiating the terms of sale and negotiating the price.” In addition, the Silent Generation, as well as Younger Millennials, were also more likely to want their agent to help them with their paperwork. Overall, 89% of buyers said they would recommend their agent for future services.
Debt continues to be a major hurdle many have to overcome when attempting to buys a home. Generation X and Younger Baby Boomers reported delaying their home purchase five years due to debt, the longest of all age groups. Younger millennials have highest share of student debt at 45%, with the median amount being $28,000. Older millennials were second with 38% reporting that they have student loan debt with a median of $35,000. While only 9% Younger Baby Boomers have student loan debt, they had the highest median amount at $42,000.
For Younger Millennials, 27% reported that the most challenging step in the homebuying process was saving for a down payment, while just 1% of Older Baby Boomers reported that this was the most challenging part of the home buying process.
“While the pandemic allowed many potential buyers to save for a down payment, demographics played a key role,” Lautz said in a statement. “There is a wave of millennial buyers who are aging into the traditional first-time buyer age range.”