2018 Study Millennials homebuyer trends
Millennials are the generation that has had the greatest participation in the activity of buying homes compared to other generations for the fifth consecutive year. This is according to the 2018 study Home Buyer and Seller Generational Trends of the National Association of Realtors.
A little more than a third of all home purchases were made by Millennials, so they had a share in the market of 36% during the past year, compared to 34% in 2017. Generation X is in second place of home buyers with 26% of the market, a fall from 28% in 2017, followed by Baby Boomers with 32% of the market, having been 30% in 2017 and Silent Generation with 6%, compared to 8% in 2017.
NAR explained that Generation X buyers ranked second because the Baby Boomers in the survey are segmented into two different groups: younger Boomers, 52 to 61 years old and older Boomers, 62 to 70 years old, due to that cover a period of greater age in comparison with the rest of the segments.
But at the same time that Millennials have participated mostly in the housing purchase market, low levels of housing inventory and high house prices held back many potential buyers.
Over the past year, the typical Millenial homebuyer had a higher family income, $ 88,200, compared to the previous year, $ 82,000, but purchased the same home size at 1,800 square feet.
However, the price paid for home was higher, $ 220,000, compared to $ 205,000 in 2017. Millennials also had higher levels of student debt than in the previous year's survey, and the majority of respondents said that saving for the down payment was the hardest part when buying a house.
According to NAR chief economist Lawrence Yun, Real Estate Agents across the country has been able to see, both the marked increase in the interest of young adult buyers over the past year, and the growing frustration once they started searching actively a house to buy, as prices continue to rise due to the limited number of properties in the market that can pay, which is causing stiff competition, rapid growth of prices and the need to save more to be able to buy.
According to Yun, these challenging market conditions have caused, and will continue to do so as long as no solution is found, that many potential Millennial buyers continue to rent unless more Gen X decides to sell, and the construction of entry-level homes is significantly recovered.
But because of some of these challenges, the property sales market has also seen an increase in multigenerational homes as more Millennials opted to live at home with their Gen X or Baby Boomer parents, increasing from 30% last year to 39 %, because they cannot afford to become independent yet.
Among the trends real estate agents are seeing in the younger generation of home purchases, they are more likely to live closer to their friends and family than to certain areas of the city or certain schools. They are also buying condominiums in the city at a very low price, and they are the generation that currently, 90% of them, are buying through an agent.
The Millennials explained that the main benefit provided by their realtor was to understand the purchase process, expanding the percentage of participation in the purchase up to 90%, compared to 84% of other generations.
About the Generational Trends Report
Since 2013, the National Association of REALTORS® has used data from their annual Profile of Home Buyers and Sellers to develop the Home Buyers and Sellers Generational Trends Report.
This report evaluates the generational differences and similarities of home buyers and sellers who purchased or sold a home within a 12 month period. The data to create the report in 2018 have been collected between July 2016 and June 2017 and the generations surveyed have been grouped as:
- Millennials (ages 37 and under)
- Generation X (ages 38-52)
- Younger boomers (ages 53-61)
- Older boomers (ages 62-70)
- The Silent Generation (ages 71-91)
It has also been known through this study that all generations hired a real estate professional for their transaction. Being 90% in the youth of the Millennial generation the most likely to buy through a REALTOR®, in addition they will also quote with a REALTOR®, and at least 84% of the other generations that have been surveyed have requested the collaboration of a REALTOR®.
According to NAR president Elizabeth Mendenhall, especially in today's fast-moving real estate market, home buyers of all ages want a REALTOR® to guide and help them through the stimulating experience of buying or selling a home.
Final conclusions of the study on property purchase
The millennial generation, despite being in a difficult situation of saving up to be able to give entry when buying a property, they are making a great effort to get independent and lead a separate life from their parents.
As can be seen in this study, and to conclude the conclusions obtained from it, the millennial generation, despite being in a difficult situation of saving up to be able to give entry when buying a property, they are making a great effort to get independent and lead a separate life from their parents.
To finish an interesting fact, after five years of strong house price growth, the U.S. housing market remains surprisingly vibrant. Demand remains robust, and residential construction activity continues to rise.
The average sale price of new properties sold in the U.S. rose by about 4.3% in December 2017, to US $ 398,900, according to the U.S. Census Bureau. On the other hand, the median sales price of new homes sold increased by a more modest 2.6% to US $ 335,400 over the same period.