June is National Homeownership Month! Homeownership is considered a pillar of the American Dream as it builds wealth through equity, tax credits, and fixed-rate mortgages. We also happen to live in an area with a very low price-to-rent ratio, so buying is often more affordable than renting.

There have been a lot of changes in recent years to the buying pool as well as to the market conditions those buyers face. Let's take a dive into the demographics, preferences, and habits of today's buyers.

meet the buyers

Millennials have been the largest share of home buyers since 2014. They made up 43% of the buyer pool in 2021. They had the second-highest income with Younger Millennials (age 23 to 31) at a median income of $90,000 and Older Millennials (age 32 to 41) at a median income of $110,300. This generation had the highest share of first-time buyers— 81% of Younger Millennials and 48% of Older Millennials were first-time buyers. Millennials are the most educated group with 84% of Younger Millennials holding a bachelor's degree or higher. 59% of Older Millennials had at least 1 child under the age of 18 living in the home. 

Gen Xers (age 42 to 56) held the second largest buyer share at 22%. This generation has the highest income of all buyers and a median purchase price of $320,000. 64% of Gen X buyers were married couples and this demographic was the most likely to purchase a multi-generational home to accommodate aging family or adult children. 22% of Gen Xers were first-time buyers and this age group is the most racially and ethnically diverse.

Younger Baby Boomers (age 57 to 66) consisted of 17% of buyers while Older Baby Boomers (age 67 to 75) made up 12% of the market. Baby Boomers were the most likely to purchase in a small town and Younger Baby Boomers were the most likely to purchase rural property.

The Silent Generation (age 76 to 96) consisted of 4% of recent home buyers. 28% purchased senior-related housing and they had the highest share of single female buyers at 27%. This age group had the lowest median income as many have recently retired from the workforce.

23% of all buyers have student loan debt with a median amount of $30,000. The median down payment for recent buyers was 13%. Millennials were the most likely to use savings as a down payment while Baby Boomers and the Silent Generation typically used proceeds from selling a house.

motivations for buying + wants

The top reason for buying in 2021 was a desire to own a home followed by a desire for a larger house, to be closer to family/friends, change in a family situation, wanting to be in a better area, and job-related reasons. Recent buyers expect to live in their homes for a median of 12 years— down from 15 years in 2020.

82% of all homes purchased were detached single-family. The typical home was 1,900 square feet, 3 bedrooms, 2 baths, and built in 1993. Older Millennials bought the largest homes with a median square footage of 2,400 while Gen Xers bought the second-largest homes at 2,300 square feet. The median purchase price for all buyers was $305,000 and they typically paid 100% of the asking price.

The most important factor in location was the quality of the neighborhood among all generations except Younger Millennials who ranked convenience to job highest. 30% of all buyers considered heating/cooling costs and energy efficient appliances to be very important features.

The Silent Generation had the most new construction buyers at 20%. The top reasons for purchasing a new build were to avoid renovations and the ability to customize. Millennials were the least likely to purchase a new home. The number 1 reason for buying previously owned homes was that they were seen as a better value.

how they searched for homes

95% of buyers used the internet to search for homes and over half of all buyers found the home they purchased online. Millennials and Gen Xers were more likely to search on their phones while older generations preferred to use a computer. Being able to see photos and detailed information were listed as the most useful features when browsing homes online.

The 76 to 96 age group had the shortest home search with a median span of 6 weeks. Other generations ranged from 8-10 weeks in their home search. Out of all buyers, the median number of homes viewed was 8.

87% used a real estate agent to purchase their home while 7% purchased directly from a builder. 90% said they would use their agent again and recommend them to others. Buyers overwhelmingly said that the biggest benefit of using an agent was help understanding the process. Other benefits were that they pointed out unnoticed features/faults with properties, provided a better list of service providers, and negotiated better terms for the buyer.

Keeping up with buyers trends can be advantageous to all. They can help you assess who your home is most likely to appeal to or provide insight into who you might be up against when writing an offer. The housing industry is a main driver of the US economy, so even if you're not in the market to buy or sell, real estate stats and forecasts can give you a peek into the overall health of the economy. View the NAR's 2022 Home Buyers and Sellers Generational Trends for more info.

If you're ready to take the leap into homeownership, our Danberry agents are there to help every step of the way!