They’re the most active generation of homebuyers in the market today, but unlike their Gen X or Baby Boomer parents, millennials prefer to buy homes that are close to their friends and families rather than a convenient location or proximity to a school according to the 2018 Home Buyer and Seller Generation Trends report published by the National Association of Realtors.
The report, which evaluates the generational differences of recent homebuyers and sellers found that inventory constraints and higher housing costs kept the overall home buying activity of millennials subdued during the year, even preventing some millennials from leaving the confines of their parents’ homes. Despite these constraints, millennials are the largest share of home buyers at 36 percent, with 65 percent of these buyers being first-time homebuyers.
The report also found that greater purchasing power was needed over the past year to buy a home. It found that over the past year, the typical millennial buyer earned a higher household income than a year ago, but purchased the same-sized home at a more expensive price. Millennials also had a higher student debt balance and more millennials found that saving for a down payment was the most difficult aspect of buying a house, the report indicated.
While buyers and sellers across all generations continued to consult a real estate agent or broker to help them, the report also found that the reasons for buying and selling a home vary across generations.
For example, 86 percent of the millennials wanted to buy a home because they thought it was a good investment, while 55 percent of Gen X buyers preferred buying a home in the suburbs. Around 17 percent of the older baby-boomer generation purchased senior-related housing. Like the millennials, the silent generation also preferred living close to family, friends, and relatives with 25 percent saying they had bought a home keeping these considerations in mind.