Photo: Jeff Cleary/Flickr
The number of Gen X homebuyers rose in 2016, increasing the generational group’s overall percentage of all US homebuyers. And while Millennial homebuyers still made up the largest percentage of all buyers last year, the two generations actually share a lot of common concerns, according to a new report published by the National Association of Realtors (NAR).
The Home Buyer and Seller Generational Trends report published by the NAR provides insights into the differences and similarities across generations of both home buyers and home sellers.
Last year, the percentage of Gen X homebuyers rose 2 percent from the previous year to 28 percent of all homebuyers — the largest share since 2014. The increase was largely due to a healthy economy, consecutive years of job growth, and the “notable increase of home values in most markets,” says NAR data.
Twenty-one percent of Gen Xers identified as a race other than caucasian, making it the most racially and ethnically diverse of all the generational groups. Gen Xers are also likely at the peak of their earning years. Last year the median income among Gen X homebuyers was $106,600 — the highest of the generational groups. They are also more likely to be both married and have children under the age of 18 in the home, according to the report.
Gen Xer home buying preferences are based upon these basic characteristics. They have the highest median priced homes, and also the largest in terms of median square footage and the number of bedrooms compared to other generational groups. Gen Xers choose neighborhoods with easy access to their jobs, but also based on the quality of its schools.
Comparatively, for the fourth consecutive year, Millennials were the largest generational group of homebuyers. Last year, Millennial homebuyers comprised 34 percent of all homebuyers, down from the 35 percent recorded in 2015.
Of the reasons cited for delaying buying a home, debt was the most common answer among both Gen Xers and Millennials. In fact, Gen Xers put off buying a home longer than Millennials due to debt, and had a balance of student loan debt over $30,000. Meanwhile, Millennials had an average balance of student loan debt of $25,000.
Gen X home sellers could also have a strong impact on the housing market in 2017.
“Fortunately, the much stronger job market and 41 percent cumulative rise in home prices since 2011 have helped a growing number of Gen Xers build enough equity to finally sell and trade up to a larger home,” said NAR chief economist Lawrence Yun in the report.
He added that much of the country’s inventory shortages could be eased as more Gen X sellers put their homes on the market this year.
Click here to read the entire report.