A growing share of homebuyers are millennials, and more of them are purchasing single-family homes outside of urban areas, according to the 2016 National Association of Realtors® Home Buyer and Seller Generational Trends study, which evaluates the generational differences of recent home buyers and sellers. The survey additionally found that although student loan debt is more prevalent among millennial buyers, they aren’t the generation with the largest student debt balances.
The share of millennials buying in an urban or central city area decreased to 17 percent (21 percent a year ago) in this year’s survey, and fewer of them (10 percent) purchased a multifamily home compared to a year ago (15 percent). Overall, the majority of buyers in all generations continue to purchase a single-family home in a suburban area, and the younger the buyer, the older the home they purchased.
Lawrence Yun, NAR chief economist, says while millennials may choose to live in an urban area as renters, the survey reveals that most aren’t staying once they’re ready to buy. “The median age of a millennial homebuyer is 30 years old, which typically is the time in 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.”
Adds Yun, “Furthermore, limited inventory in millennials’ price range, minimal entry-level condo construction and affordability pressures make buying in the city extremely difficult for most young households.”
For the third straight year, the largest group of recent buyers were millennials, who composed 35 percent of all buyers (32 percent in 2014), more than the combined amount of younger and older boomers (31 percent). Generation X were 26 percent of buyers, and the Silent Generation made up 9 percent.
Financing the Purchase
This year’s survey underlined the challenges debt had on some buyers’ ability to purchase a home. While debt delayed saving for a down payment for a median of four years for all buyers, the number of years postponed increased from three years for millennials to six years for older boomers.
Among the share of buyers who said saving for a down payment was the most difficult task, millennials were most likely to cite student debt (53 percent) as the debt that delayed saving, while credit card debt was indicated more by Gen X (44 percent) and younger boomers (36 percent).
According to Yun, student debt is likely impacting more than just the millennial generation’s ability to buy a home. “Whether it’s from financing their own education or borrowed for their children, it’s somewhat surprising to see a higher median amount of student debt among Gen X ($28,000) and younger boomer buyers ($29,100) compared to millennials ($25,000),” adds Yun. “One of the many reasons housing supply has been subdued in recent years may be because a segment of homeowners have decided to delay trading up or moving down in order to pay down their debt, including from student loans.”
The share of millennials buying in an urban or central city area decreased to 17 percent (21 percent a year ago) in this year’s survey, and fewer of them (10 percent) purchased a multifamily home compared to a year ago (15 percent). Overall, the majority of buyers in all generations continue to purchase a single-family home in a suburban area, and the younger the buyer, the older the home they purchased.
Lawrence Yun, NAR chief economist, says while millennials may choose to live in an urban area as renters, the survey reveals that most aren’t staying once they’re ready to buy. “The median age of a millennial homebuyer is 30 years old, which typically is the time in 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.”
Adds Yun, “Furthermore, limited inventory in millennials’ price range, minimal entry-level condo construction and affordability pressures make buying in the city extremely difficult for most young households.”
For the third straight year, the largest group of recent buyers were millennials, who composed 35 percent of all buyers (32 percent in 2014), more than the combined amount of younger and older boomers (31 percent). Generation X were 26 percent of buyers, and the Silent Generation made up 9 percent.
Financing the Purchase
This year’s survey underlined the challenges debt had on some buyers’ ability to purchase a home. While debt delayed saving for a down payment for a median of four years for all buyers, the number of years postponed increased from three years for millennials to six years for older boomers.
Among the share of buyers who said saving for a down payment was the most difficult task, millennials were most likely to cite student debt (53 percent) as the debt that delayed saving, while credit card debt was indicated more by Gen X (44 percent) and younger boomers (36 percent).
According to Yun, student debt is likely impacting more than just the millennial generation’s ability to buy a home. “Whether it’s from financing their own education or borrowed for their children, it’s somewhat surprising to see a higher median amount of student debt among Gen X ($28,000) and younger boomer buyers ($29,100) compared to millennials ($25,000),” adds Yun. “One of the many reasons housing supply has been subdued in recent years may be because a segment of homeowners have decided to delay trading up or moving down in order to pay down their debt, including from student loans.”