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Young homebuyers expand market dominance
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Younger buyers tightened their grip on the top spot in the home buying market in 2021, navigating their way with a proficiency in online tools and a deepening trust in real estate agents.
The share of millennials (ages 23 to 41) among homebuyers rose to 41% by the end of the year, up from 37% in 2020, according to the 2022 Home Buyer and Seller Generational Trends Report from the National Association of Realtors (NAR). Millennials have made up the largest share of buyers every year since 2014.
In 2021, almost two out of three millennials - 65% - found the home they purchased on the internet, a number that gradually decreases with older generations. More than 90% used the services of a real estate agent, the largest percentage among all generations.
About 80% of younger buyers possessed a bachelor’s degree or higher and close to 50% reported delays in purchasing a home because of restrictive student debt.
Another 27% cited “saving for the down payment” as the most challenging step in the home buying process, compared to just 1% for Baby Boomers and the Silent Generation (57 and older).
Thirty percent of millennials reported receiving down payment help in the form of a gift or loan from a friend or relative, and 24% lived with friends or family before buying.
The study also found that first-time home buying among younger generations is on the rise, with over four out of five younger millennia (ages 23 to 31) home buyers – 81% – purchasing for the first time. Just under half – 48% – of older millennial (33 to 41) buyers were first-time buyers.
While millennial buyers are aging into the traditional first-time buyer range, the report found the percentage of millennial sellers is also on the rise. For the first time, an older millennial was more likely to be a first-time seller than a first-time buyer.
A huge majority of young buyers (80%) purchased single-family homes and continued to dispel the myth their generation prefers urban living: More than 70% of millennial buyers moved either to suburban areas (51%) and small towns (20%).
However, younger buyers tended to move shorter distances. Among all ages, there was a median of 15 miles between newly purchased homes and previous residences. That was lowest among younger millennials (10 miles).
And younger people expect to stay longer. Almost half reported a desire to stay in their new home for 16 years or more, with 70% expecting to stay 10 years or more. Overall, the average tenure expectancy is 12 years, up from 10 years in 2020.
Despite issues with affordability and accelerated competition amid the pandemic housing boom, a vast majority of buyers – young and old - reported a positive outlook on homeownership, with 86% saying their home purchase was a sound investment.
From building personal wealth and fostering communities, the value of homeownership is handed down from generation to generation.
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Not intended to solicit loans in states I am not licensed in. Bay Equity LLC. Equal Housing Opportunity. This is not a commitment to lend or extend credit. Restrictions may apply. Rates may not be available at time of application. Information and/or data are subject to change without notice. All loans are subject to credit approval. Not all loans or products are available in all states. Bay Equity LLC, 770 Tamalpais Drive, Suite 207, Corte Madera, CA 94925; NMLS ID#76988 | NMLS consumer access: www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/76988 | Texas SML Mortgage Banker Registration #76988. Texas Recovery Fund notice, Click Here: https://texreg.sos.state.tx.us/fids/201203137-2.pdf | State Licenses: http://bayeq.us/114235.
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