Images and Information Source: National Association of Realtors
If the Millennial generation (ages 18-35) is so attracted to city living, why are many of them moving to the suburbs according to a new report from the National Association of Realtors®? The 2016 survey on home buyer and seller generational trends indicates that Millennials, which make up the largest home buying group nationally, for the first time are shifting to the suburbs and shifting away from multi-family homes to single-family homes. This may be driven in part by Millennials starting families — 45% of them now have children. They are also beginning to settle into relationships – 64% of them are married couples as 12% unmarried, the largest percentage of all generations surveyed.
National Association of Realtors® chief economist Lawrence Yun says once Millennials shift from renting to buying, they look to the suburbs. “The median age of a Millennial homebuyer is 30 years old, which typically is the time of life where one settles down to marry and raise a family,” he said. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out.”
The survey also indicated that while Millennials do have student loan debt, contrary to conventional wisdom they aren’t the generation with the largest student debt balances. The larger balances belong to what the report terms the “Younger [Baby] Boomers (ages 51-60), 11% of whom have debt, with the highest median balance of debt at $29,100 among the generations. 44% of Millennials have debt, at a lower median balance of $25,000, which may have a greater impact on their ability to save for a down payment due to their presumably overall lower earning power.
The Millennials comprise the largest percentage of home buyers, at 35% of all buyers. This was closely followed by the baby boomers at 31%, Generation X at 26% and 8% of buyers aged 70-90. The percentage of Millennials that are interested in buying a home increased by 9% from the prior year’s study to 48%. Interestingly, the report also indicates that the younger the buyer, the older the home they purchase.
Home Buyer and Seller Generational Trends: The Baby Boomers
According to the US Census, the median age here in Marin County is 45 years old, compared to the US national average of 37 years old. The report breaks the baby boomers into two groups, younger (buyers 51 to 60) and older (buyers 61 to 69). Both segments bought homes in 2015 at about the same rate, 16 and 15 percent respectively. There are some differences however– younger boomers are more likely to buy multi-family homes like condominiums. Sometimes referred to as the “sandwich generation” because they are caring for their own children as well as for their parents, the younger boomers are likely to buy this type of home for children still living at home, and for aging parents who are needing to downsize.
The older boomers (61 to 69) move to be closer to family and friends, and due to retirement. Of all the groups, the older boomers plan to stay in their homes the longest at 20 years.
In Marin County, shifting lifestyles of the baby boomers is evident with the home buyers I work with every day. While a few years ago many of my buyers were looking for large multi-story homes, now I am seeing more and more buyers who are looking for either single-level homes or homes I refer to as “single level living” where the living room, kitchen, laundry and at least one bedroom is on the main level (see this one in Mill Valley, coming soon.) Interestingly, I also work with younger home buyers who want single-level homes so they can easily watch their children from all rooms of the home.
Home Buyer and Seller Generational Trends: The Home Search
The latest survey continues to reinforce how important the internet is for today’s home buyers of all ages. According to the report at the national level, looking online was the first step for 38% of buyers 35 years and younger, 43% aged 36 to 50, 47% aged 51 to 60, and 53% aged 61 to 69. This is counter-intuitive to the common belief that younger people tend to be more tech savvy and use the internet more. I know as a boomer myself I am on the internet just about all day and all night.
Here in California, the home of tech, the percentage of home buyers using the internet to search for homes is much higher than the national average, according to the California Association of Realtors®. Here in California, 96% of home buyers used the internet during the home buying process.
That is one reason why I have just just re-launched an all new thomashenthorne.com website featuring improved home search capability, better visuals, and full mobile smartphone compatibility. More than 60% of the visitors to my site are using mobile, and upwards of 80% of visitors to my Facebook page are on mobile devices. There’s a good chance you’re reading this very article on your mobile device.
All generations continue to see the value that a highly-trained and well-respected Realtor® adds to the home buying and home selling process. Between 85 and 89 percent of all generations surveyed purchased their home through an agent, while 5-7% of older home buyers purchased directly from the previous owner.
If you’re interested, you can view the full Home Buyer and Seller Generational Trends report here. As always, I am happy to help you with your real estate needs or answer any questions. Please call / text me at 415.847.5584 or complete the below contact form.
