Plus: How millennial home buying trends may redraw the map
Homebuyers from the millennial generation – born between 1981 and 1996 – look to be mirroring those from the silent generation, born between 1928 and 1945, if recent trends are anything to go by. The similarities between these two, so separated by time, is especially striking when compared to Baby Boomers and Gen Xers. But what are the similarities, why are they alike, and what does this mean to the future of America’s metros? Here is what you need to know about millennial and silent generation homebuyers.
Millennial homebuyers and the silent generation
First things first: the silent generation includes anyone born from 1928 to 1945; the term millennial, essentially the grandchildren of the silent generation, includes anyone who was born between 1981 and 1996. And somewhat surprisingly, they share similarities in homebuying preferences, according to a recent study by the National Association of Realtors.
The first similarity is that both generations prize family, friends, and community more than previous generations, at least as far as homebuying is concerned. For instance, 33% of home sellers aged 74 to 94 said the main reason for selling their previous home was to be closer to family and friends. Fifty-three percent (53%) of homebuyers between the ages of 22 to 29 said their main priority when looking for a home is to be close to family and friends.
By contrast, Generation Xers (born between 1965 and 1979) were more concerned with location, design features, and size, and purchased the most expensive single-family houses at a median price of $320,000, according to the report. Gen Zers were also the most likely to relocate for job opportunities. Boomers (born between 1946 and 1964) on average bought the newest homes and moved the farthest distance, a median of 35 miles.
All of which is to say that it appears millennials are prioritizing mental health and family time over long commutes and snazzy home designs.
How will this trend in millennials change the future of America’s metros?
Due in part to the issue with housing affordability and the emergence of remote working (as well as solid job markets), Sun Belt metros are being touted as regions where millennial homebuyers are likely to flock. Rather than New York, Boston, Chicago, San Francisco, or L.A., states like Colorado, Utah, and Arizona are expected to see an influx. The warm weather suburbs of Austin and Dallas, both in Texas, Raleigh and Charlotte in North Carolina, and Miami, Tampa, and Jacksonville in Florida are also expected to draw younger homebuyers. These areas are not only affordable and warm, but they are brimming with new construction and top-tier school systems, and are ideal for older family members and retirement communities.
What are the influencing factors and results of millennial home buying trends?
Younger millennials (those born between 1990 and 1998) bought the lowest-priced homes of any generation in 2019 at a median of $206,300. The reason for this shift in trend is likely due to lower incomes, inventory-led affordability, and student debt. Younger millennials also bought the smallest homes (median square feet: 1,600), and with a median build date of 1978, the oldest. Ninety-six percent (96%) of younger millennials financed their home purchase, with a median down payment of 8%.
Commuting costs appeared to be more top of mind to millennials than previous generations, with 45% citing it as an influencing factor. And more than other generation surveyed, millennials were more likely to compromise in the house they bought, usually with price and condition. Millennials’ time in the house was also the shortest, at 10 years. Only the silent generation was comparable. Ninety-two percent (92%) of millennials were most likely to use a real estate broker or agent to help guide them through the homebuying process.
What influenced the silent generation homebuyers?
After the Great Depression, the silent generation wanted to rebuild systems for a greater future. Children during the 1930s, and too young to contribute to the war effort in the Second World War, the silent generation wanted to make life in the US better for their kids, focusing on family, home ownership, employment, and security.
This is why the American suburb represented an ideal for the silent generation, who wanted to recover from the economic upheaval of the 1930s and mourn those lost in WWII. On the back of these grim realities, the silent generation moved to the suburbs for a fresh start, similar to millennials today. All they wanted to do was start a family, settle down, and rebuild.
