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Millennials are finding ways to become homeowners—despite an extremely challenging and expensive housing market.
About 38% of all buyers were millennials last year, according to the National Association of Realtors®’ 2024 Home Buyers and Sellers Generational Trends report. That’s up from 28% in the previous year.
What’s more: About a third of all buyers, 32%, purchased their very first homes—even with high prices and mortgage rates. First-time buyers made up only 26% of home shoppers in the year before.
“What’s important to note about millennials being the biggest generation of buyers is older millennials are more likely to be repeat buyers in the market,” says NAR’s Deputy Chief Economist Jessica Lautz. “They have earned housing equity that allows them to make housing trades. Younger millennials are more likely to be first-time homebuyers. They’re more likely to use family help to assist them into homeownership.”
The report is based on a survey of more than 6,800 buyers who purchased a primary residence in the 12 months ending June 2023. The income data in the report was from 2022. (NAR defined Generation Z as those born between 1999 and 2011; millennials born between 1980 and 1998; and Generation X born between 1965 and 1979. Baby boomers were 1946 through 1964, while the silent generation was 1925 through 1945.)
Why are more young people buying homes?
The fact that there are more millennial and first-time buyers might come as a surprise during a time when there is a dearth of properties for sale—and rising mortgage rates and home prices have made purchasing a home increasingly unaffordable. Today’s buyers are now spending 97% more on their monthly mortgage payments than they did four years ago.*
Mortgage rates averaged 6.79% for a 30-year fixed loan in the week ending March 28, according to the most recent Freddie Mac data. Meanwhile, the median home list price was $415,500 in February, according to the most recent Realtor.com® data.
And yet 17% of younger millennials, aged 25 to 33, and 21% of older millennials, 34 to 43, were able to purchase homes, according to the NAR report. Homebuyers had a median income of $107,000, with younger millennials having a median household income of $106,000 and older millennials having $127,700.
“Millennials are an enormous demographic. As rising interest rates sent shock waves through the housing market, many millennials reassessed plans,” says Realtor.com® Chief Economist Danielle Hale.”But while they may have delayed homeownership ambitions, this year’s data show that this generation will not be deterred.”
More than half of younger millennials, 52%, and 45% of older millennials, 35%, said their top reason for when they purchased their homes was because it was the right time to do so. About a quarter of both groups said they didn’t have a choice and had to buy.
About 82% of all buyers said they considered buying a home a good financial investment, according to the NAR report. This was particularly true for younger millennials, at 86%.
“The American dream of homeownership is alive, even though it is hard to attain,” says Lautz. “When someone purchases a home, it’s because that’s what they want for their future.”
The younger generation may have also benefited from the pullback from investors vying over the same more affordably priced homes, says Hale. This may have helped some to achieve homeownership.
Baby boomers also seemed to step aside a bit, giving millennials more of an opportunity in the market. They purchased about 31% of all homes, down from 39% in the year before, according to the NAR report
Generation X bought 24% of all homes. Meanwhile, members of Generation Z—the oldest of whom are just 24—purchased 3% of all homes. But nearly a third of them were single women. They’re also most likely to identify as LGBTQ+, Lautz says.
Overall, more than half of recent buyers, 59%, were married, while 9% were unmarried couples. However, 19% were single women and 10% were single men. Five percent identified as part of the LGBTQ+ community.
“Women are a dominant force in the market,” says Lautz. “They value and prioritize homeownership. Women are more likely to be caregivers, to have children, or caring for an elderly relative.”
Baby boomers sold the most homes
Perhaps unsurprisingly, baby boomers were the ones selling the most homes, making up 45% of those listing their properties. This generation owns the largest share of homes and is likely to have lived in their residences for longer.
On average, sellers spent about 10 years in their residences before listing them. However, older millennials were more likely to live in their abodes for just six years, while Generation X, baby boomers, and the silent generation were in their homes for about 15 years.
Buyers typically moved only about 20 miles away from their previous home, down from 50 miles last year.
What kinds of homes are homebuyers purchasing?
Most buyers, 87%, purchased previously owned homes. Just 13% closed on new construction, many of whom wanted to avoid costly renovations and other problems that would need to be fixed.
“A lot of purchase choices come down to what is available in a local community,” says Lautz. “There are just more existing homes. They also tend to be more affordable than new homes.”
Detached single-family homes remained the most common purchase, making up 79% of all homes that were sold. These homes typically had three bedrooms, two bathrooms, and 1,860 square feet of living space. The average home was constructed in 1985.
Nearly half of buyers, 47%, purchased in the suburbs or in a subdivision. Twenty-three percent chose a small town, while 14% opted for a rural area and another 14% bought in an urban area. Just 2% purchased homes in resort areas.
* This calculation uses the most recent Realtor.com® home list price data and Freddie Mac’s average weekly mortgage rate data. It also assumes buyers put down 20% and does not include taxes, insurance, or homeowners association fees.
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