Millennials replaced baby boomers as the largest group of homebuyers in 2023.
The combined share of millennials, both younger (ages 25 to 33) and older (ages 34 to 43), made up a combined 38% of the home purchase market last year, up from 28% in 2022, according to the 2024 Home Buyers and Sellers Generational Trends report from the National Association of Realtors (NAR).
Meanwhile, baby boomers — comprising both younger boomers (ages 59 to 68) and older boomers (ages 69 to 77) — saw their share decrease from 39% to 31% during the same period.
“The generational tug-of-war between millennials and baby boomers continued this year, with millennials rebounding to capture the largest share of home buyers,” Jessica Lautz, NAR deputy chief economist and vice president of research, said in a statement. “This notable rise is attributed to both younger millennials stepping into homeownership for the first time and older millennials transitioning to larger homes that suit their evolving needs.”
The report highlights a surge in first-time buyers across all age groups, with millennials leading the charge. Notably, 32% of all buyers in 2023 were first-timers (up from 26% in the prior year), with millennials comprising 75% of this demographic. Additionally, older millennials and Generation X (ages 44 to 58) also saw significant representation among first-time buyers, respectively accounting for 44% and 24% of this group.
Generation Z, which comprises individuals between ages 18 and 24, only accounted for 3% of all buyers. But among this age group, 31% were single women, a significantly higher proportion than in any other age group.
“Gen Z buyers are entering the housing market, and their demographics are emerging distinctly from other age groups,” Lautz said. “More than half are single buyers, outpacing all age groups of single men and single women, and they are also most likely to identify as LGBTQ+.”
Baby boomers remained the largest generation of home sellers, accounting for 45% of all sellers in 2023, down from 52% in 2022.
The tenure of homeownership varies by generation. The median amount of time spent in a home among all buyers was a 10-year stay before selling, but older millennials sold their homes after a median stay of just six years. Meanwhile, Gen X, baby boomers and the Silent Generation (ages 78 to 98) typically stayed in their homes for 15 years.
“Baby boomers continue to dominate the home-selling market as they make pivotal decisions regarding their retirement living situations, whether it’s right-sizing or moving closer to loved ones,” Lautz said. “Benefiting from longer periods of homeownership compared to other generations, boomers approach these transactions with substantial equity, enabling strategic housing trades.”
A recent survey conducted by Redfin found that over three-quarters (78%) of older American homeowners (ages 60 and up) are planning to stay in their current home as they age. Meanwhile, about one in five baby boomers (19%) are considering moving into a community with older people or have already done so. Smaller shares of baby boomers are considering moving in with an adult child, moving to an assisted-living facility or moving in with friends.
The inertia of baby boomers is making it harder for younger Americans to find a family home, according to a Redfin analysis. In fact, empty-nest baby boomers own 28% of three-bedroom homes in the U.S., while millennials with kids own just 14%. Furthermore, nearly 80% of boomers own the home they live in, compared to 55% of millennials.
Homeownership continues to be perceived as a sound financial investment by 82% of all buyers surveyed by NAR — especially younger millennials. Across all generations, the role of real estate agents also remains pivotal. Nine in 10 buyers expressed willingness to enlist their agent’s services again or recommend them to others. Similarly, sellers showed a high likelihood of reusing or referring their agents.
“The universal value of owning a home transcends every generation, serving as a cornerstone for both personal prosperity and community development,” NAR President Kevin Sears said in a statement. “In navigating the complexities of the market, buyers and sellers continue to rely on agents who are Realtors for their expertise and guidance, underscoring the invaluable service they provide in bringing dreams of homeownership to life.”
To conduct this study, NAR sent a 129-question survey in July 2023 to 189,750 recent home buyers and received 6,817 responses from primary residence buyers. Buyers had to have purchased a primary residence between July 2022 and June 2023.
Read more at HousingWire.com
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