Home Buyers Broken Down By Generation
We continue to have inventory shortages in real estate markets nation wide and people continuously ask us “who is buying all of these homes?”
So here is our answer broken down by generation.
Let’s start off by talking about the “baby boomers” a baby boomer was born between 1946 – 1964. They dominated the buying pool for the last two decades. When we went through the great recession the “boomers” were about the only generation out there able to purchase. They were downsizing at the time selling their big family home and moving to all one level or getting rid of it all together to enjoy their second home somewhere sunny. They were able to capitalize on the decreasing prices and buy with cash. Many of the “boomers” are now trading in for condos (if they can find one) or just staying put and “aging in place” They have not been the one talked about in this buying frenzy of late. The generation of conversation is the first generation that has competed with the boomers in population the MILENNIALS!
Millennials have surpassed the boomers population (previously the largest generation) and have now began to dominate the buying pools. Millennials were born 1981 – 1996. Most of them are now in the “First Time Home Buyers” pool. Living in a tech industry heavy location, the Millennials are doing pretty well for themselves. Many of their entry level jobs starting in the 6 figures. Pair 6 figures with 3% interest rates & they would be crazy NOT to be engaging real estate. Here in lies the first part to the inventory shortage. Pair the largest generation and a back log of new construction (COVID restrictions & still a depletion from the building bust during the recession) there aren’t enough homes to house these anxious first time home buyers. While these Millennials are the driving force in today’s buying pool, we must not forget the Generation X.
This generation is smaller than the cohorts that came both before and after. But the group is also in its prime earning and homebuying years, meaning it's a force to be reckoned with. Gen X was born 1965 – 1980. Generation X is not the biggest generation in the U.S. right now, They’re not the most talked about or fretted over but they have been in this real estate game longer than the Millennial and have more liquid funds than the Boomers, allowing them to win more often than both counterparts in this multiple offer land of low inventory.
Despite all of that, they have families, jobs and needs — they’re a major force in the homebuying world. They’re the ones moving up, looking for more space, and buying houses at price points that younger consumers can only dream about. All of which is to say that while the baby boomers might represent the past and millennials and Gen Zers the future, Generation X very much dominates the present. And that means understanding them is a vital part of making sense of the housing market.
Median Gen X household net worth has since recovered, and by 2016 had surpassed pre-recession highs. 37% of Gen X households, make between $85,000 and $150,000 per year, according to NAR. Another 17 percent make more than $200,000. A larger percentage of Generation X are high income earners than is the case for any other generation in the U.S. right now. But the housing collapse of 2007 and 2008 remains a major chapter in the Gen X story. In any case though, Gen Xers are now late in their careers and in the prime of their earning lives.
In terms of size, there are about 65 million Gen Xers in the U.S., according to the Pew Research Center. That makes the generation smaller than both the older baby boomers, who number more than 71 million, and the millennials, a category that includes more than 72 million people.
Gen X bought their first home likely during the great recession and have fought their way back out… to say they are the most savvy in todays market might be an opinion but one thing I can tell you… They are older and more experienced than the millennials, and when they went to get a home in 2022 it won’t be their first rodeo.
