Younger generations are stepping into homeownership in greater numbers than ever.
A recent study found that first-time home buying among millennials is increasing, with more than 4 out of 5 younger millennial home buyers – 81% – purchasing for the first time. Just under half of older millennial buyers were first-time buyers, according to the study from the National Association of Realtors (NAR).
The NAR 2022 Home Buyer and Seller Generational Trends report looks at similarities and differences of recent home buyers and sellers across generations.
Millennials now make up 43% of home buyers, which is the most of any generation and rose from 37% last year. Their home buying process is likely to include using the internet to find the home they ultimately purchase and they are the most likely generation to use a real estate agent. Eighty-seven percent of all buyers purchased their home through an agent. This number was highest with younger millennials at 92% and older millennials at 88%.
The NAR report categorizes the younger buyers into younger millennials – 23 to 31 years old – and older millennial buyers – 32 to 41 years old.
Buyers from all generations cite their top reasons for using a Realtor as wanting help finding the right home to purchase, negotiating the terms of sale, and negotiating the price. Younger millennials were also more likely to want help with paperwork.
“Some young adults have used the pandemic to their financial advantage by paying down debt and cutting the cost of rent by moving in with family. They are now jumping headfirst into homeownership,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “While young buyers use new tech tools, they also use real estate agents at higher rates than other buyers to help find the right home and negotiate the terms of the transaction.”
Lutz noted that millennial buyers are aging into the traditional first-time buyer age range. He said that for the first time it is more likely for an older millennial to be a first-time seller than a first-time buyer. The percentage of millennial sellers grew from 22% to 26% over the past year. The NAR report also revealed that the baby boom generation make up the largest share of home sellers at 42%.
“Many factors can contribute to the decision to buy or sell a home,” Lautz continued. “For all home buyers under the age of 57, the main driver was the desire to own a home of their own. Among those 57 and older, the desire to be closer to friends and family was the top reason, followed by the desire for a smaller home.”
Financing a home, saving the down payment and debt were cited as major challenges. Even so, 86% of all buyers reported they value a home purchase as a good investment and roughly nine out of 10 people would recommend their agent for future services.
Read the full story at: nar.realtor/newsroom/nar-report-shows-share-of-millennial-home-buyers-continues-to-rise.
By Tom Kalinski is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a 40-year background in commercial and residential real estate. For questions, email Tom at [email protected], call 303.441.5620, or visit boulderco.com.