Housing Market

Gen Y comprises largest share of overall, first-time homebuyers

Home For Sale Sign in Front of Beautiful New HomeData released on Tuesday by the National Association of Realtors showed that Generation Y—or Millenial—consumers accounted for the largest share of both overall and first-time homebuyers in recent home purchases.

Millenials, sometimes referred to as Generation Next—those born between 1980 and 1995—accounted for 31 percent of recent home purchases, followed by Generation X—those born between 1965 and 1979—at 30 percent.

Overall, Millenials also had the largest share of first-time homebuyers at 76 percent. As age increases, the share of first-time homebuyers tends to decrease.

“Given that Millenials are the largest generation in history after the baby boomers, it means there is a potential for strong underlying demand,” NAR Chief Economist Lawrence Yun said. “Moreover, their aspiration and the long-term investment aspect to owning a home remain solid among young people. However, the challenges of tight credit, limited inventory, eroding affordability and high debt loads have limited the capacity of young people to own.”

Twelve percent of all recent homebuyers, according to the data, delayed their home purchase as a result of outstanding debt. Fifty-six percent of Millenial buyers who took longer to save for a down payment cited student loan debt as the greatest obstacle.

Additionally, while most home purchases made by all generations were in suburban areas, Millenials were more likely, at 19 percent, to purchase in an urban or city area, compared to 12 percent of Older Boomers—those born between 1946 and 1954.

Younger buyers who financed a home generally relied on savings for their down payment, while older buyers were more likely to use funds from the sale of a primary residence. Younger buyers also relied on real estate agents to help them navigate the buying process, whereas older buyers relied on real estate agents to identify unnoticed features or faults of a property.

A full copy of the data can be found at the NAR’s website.

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