A recent study by the National Association of Realtors (NAR) reveals that the generation aged between 23 and 41 now makes up the largest in the US real estate market. The millennials’ share now accounts for 43% of the total, up from 37% in 2020. In addition, they mainly bought single-family homes and, in the suburbs, or small towns.
Millennial share grows by 6% in a year
The NAR 2022 Home Buyer and Seller Generational Trends report looks at recent statistics for the US housing market in terms of the ages of buyers and sellers. Significantly for the latest edition, it discovered that millennials have increased their market share by 6% in a year.
In 2020, their percentage totalled 37%, while in 2021, it rose to 43%. In addition, this generation of buyers aged 23 to 41 primarily sourced the property they bought online and the vast majority used a real estate agent.
First-home buyers on the rise
The report also found that first purchases increased among the younger generations. In the younger sector of millennials (23 to 31), 80% bought for the first time last year. In the older segment (32 to 41), 48% were first-time buyers.
“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,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “They are now jumping headfirst into homeownership,” she added.
Single-family homes in the suburbs most popular
Single-family homes took the lion’s share of the US real estate market in 2021 and across the generations. According to NAR, this housing type featured as the most popular for every age group.
In terms of location, younger buyers tend to show a preference for suburbs and small towns. “Younger buyers dispelled the myth that they are flocking to city centers,” said Lautz. 51% of all age groups purchased in the suburbs and 20% in small towns.
Younger generations tend to stay nearer to home when they move. The report found that millennials buy property within 10 miles of their previous home, lower than the national average of 15 miles.
They also spend less time in a property, typically for 10 years. The national average stood at 12 years in 2021, down from 15 in 2020.
Most expensive US real estate
Unsurprisingly, since they had the highest household income, Generation X (41-56 years old) paid the most for property last year. The average purchase for this group cost US$320,000 and the properties had 2,300 square feet.
American dream lives on
Most would-be homeowners said that debt and the down payment were the most significant obstacles they faced when purchasing. As a result, many delayed their purchase by five years and 27% of younger millennials claimed that getting a deposit together was their main barrier.
However, 86% of buyers said that buying US real estate was a good investment. “The value of homeownership is indisputable,” said Leslie Rouda Smith, NAR President. “It’s seen as a cornerstone of the American dream across the generations.”
(Source: NAR)
