The National Association of REALTORS® (NAR) recently released its 2021 “Home Buyer and Seller Generational Trends” report. Among the findings, NAR highlighted a trend that’s continued for the past several years: Millennials continue to make up the largest share of buyers since NAR’s 2014 report, with 82% of younger millennials and 48% of older millennials being first-time homebuyers more than any other age group.
NAR also notes that generational homes have also made repeat appearances over recent years, with 18% of homebuyers aged between 41 and 65 purchasing a multigenerational home—one that will house not only the immediate family, but also adult siblings, adult children, parents or grandparents. Homebuyers aged 75 go 95 were the second most likely to purchase a multigenerational home.
“There are a variety of reasons why large families and extended families are opting to live together, one of which is that it’s a great way to save money,” said Jessica Lautz, NAR’s vice president of Demographics and Behavioral Insights, in a statement. “Also, in light of the pandemic, many grandparents and older relatives found that being under a single roof—quarantining with family rather than away—worked out better for them.”
NAR found that barriers to homeownership include inventory challenges across the board, with affordability constraints also posing problems for younger homebuyers.
Nearly six in 10 homebuyers between the ages of 22 to 40 said finding the right property was the most challenging step in their purchasing process. Additionally, more than half of all homebuyers (53%) said finding the right property was the most difficult step.
Those aged 22 to 30, however, have found that affordability is the bigger issue, with 28% in that age group living with parents, relatives or friends before purchasing in order to save up for a home. According to NAR, this percentage is higher than any other generation.
This generation also has distinct lifestyle characteristics that influence moving trends.
NAR found that 54% of homes purchased by homebuyers aged 31 to 40—older millennials—were located in a suburb or subdivision. Of this age group, 69% said the quality of the neighborhood influenced their decision making. For buyers aged 22 to 30, 65% share that sentiment. Of even more importance for the 22 – 30 age group, however, was “convenience to workplace,”—74% said proximity to where they worked was imperative when looking at neighborhoods.
“The younger millennials overwhelmingly answered that they prefer to live closer to work, as many don’t want a long commute and this was evident in their buying habits,” said Lautz. “Additionally, both of these groups also placed a high value on being close to family and friends as 57% said that dynamic factored into what neighborhood they ultimately chose.”
For older boomers and the silent generation, 35% and 36% respectively said they valued neighborhoods that are close to areas where they can shop.
One thing that has not changed is having real estate agents at the center of the transaction. According to NAR, of all buyers, 88% said they used a real estate agent as an information source during their home search. This rises to 91% among younger millennial buyers ages 22 – 30.
“Buyers used all tools available to them – whether it be a mobile device, yard sign or an online video—but at some point, nearly all buyers turned to an experienced agent to assist with the transaction,” said Lautz. “This is especially true among younger millennial consumers as they are likely first-time buyers and need help navigating the market and all steps involved in the process.”
“REALTORS® continue to be an integral part of both the home-buying and the home selling process,” said NAR President Charlie Oppler, a REALTOR® from Franklin Lakes, New Jersey, and the CEO of Prominent Properties Sotheby’s International Realty. “Buyers and sellers should understand that we can assist with every part of the real estate transaction, from finding or listing a property, securing a loan and sorting through the exhaustive paperwork.”
For more information, please visit www.nar.realtor.