Move over, baby boomers. The millennials are driving the housing market these days.
According to the 2018 Home Buyer and Seller Generational Trends study, released by the National Association of Realtors (NAR), millennials now account for 36% of home purchases, compared to baby boomers at 32%, Generation Xers at 26% and the Silent Generation (born between 1925 and 1945) at 6%.
As they move into the housing market, millennials face the frustrations of a nationwide trend of low inventory, which is forcing a steady rise in prices.
“Prices keep rising for the limited number of listings on the market they can afford, which is creating stark competition, speedy price growth and the need to save more in order to buy,” notes Lawrence Yun, NAR chief economist. “These challenging market conditions have caused-and will continue to cause- many aspiring millennial buyers to continue renting unless more Gen. Xers decide to sell, and entry-level home construction picks up significantly.”
Last year, an 1,800 square foot home cost an average $205,000 nationwide, notes the NAR. The same square footage now costs $220,000.
More than half of the millennials in the study (52%) bought homes in the suburbs. The vast majority (85%) chose a single-family home rather than a condominium (2%).
Among the study’s other generational findings:
46% have student debt
65% were first-time homebuyers
86% believe buying a home is a good investment
Generation X (1965-1979)
13% had a distressed sale in the past
16% bought a new home for its green or energy efficient features
55% bought in a suburb or subdivision
Younger Boomers: (1955-1964)
Represent 18% of recent home buyers
Expect to live in their home a median of 20 years
Older Boomers (1946-1954)
15% bought a new home due to retirement
17% purchased senior-related housing
Moved 30 median miles between the new and previous home
Silent Generation: (1925-1945)
12% bought a duplex, apartment or condo
25% purchased a home to be closer to family, friends or relatives.