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Surprise nuggets in the 2020 home buyer, seller generational trends report

(REAL ESTATE) You may think you know generational behaviors, but there are interesting trends emerging as millennials begin to behave more like the Silent Generation.

generational trends report nar

Everything you assumed about annoying millennials like me is apparently wrong. Sure, I had avocado sprouted grain toast and local fair-trade coffee for breakfast, but don’t let that ridiculous exterior fool you… it turns out that millennials are increasingly behaving more like the Silent Generation than any other.

According to the National Association of Realtors’ (NAR’s) 2020 Home Buyer and Seller Generational Trends Report, there are some shifts in consumer behavior that are worth noting, to better serve the market.

Dr. Jessica Lautz, VP of Demographics and Behavioral Insights emphasizes that “it is really important not to pigeon hole a buyer just based on their age,” and that it is important to remain informed of the trends.

For example, the aforementioned millennial generation behaving like the Silent Generation. Dr. Lautz notes, “when buying a home, they want to be close to friends and family,” a behavior typically emphasized by retirees, and that “they’re buying at affordable price points, and using referrals to find agents at high rates.”

Additionally, it’s not just Boomers that stay put – millennials want to own homes, and they intend on planting deep roots, Boomer style. The study also indicates that millennials are relying more on savings to purchase their homes than past generations.

Another surprise gem in the data amassed by NAR? Dr. Lautz observes that while most people think millennials want to bebop around inner cities, “lots of younger millennials are moving to small towns and suburbs where they can find affordability.” #MythBusted

In 2020, the real estate referral method looks a lot like 1920 in that there is a high level of trust in personal referrals. That’s worth noting if you’re spinning your wheels to attract new clients when business is likely to come from your existing clientbase.

It’s not all avocados and sunshine, though.

Dr. Lautz said, “there is a sad data point in that Gen Xers are still struggling to come out of the recession when it comes to home buying trends. They’re back on their feet financially, but many were underwater, which stalled the selling of their property, and they’re now recovering, but they have a longer period of time they have to wait before their finances are in order to do that.”

In other words, the recession has had a lingering impact on this middle child of a generation.

The 2020 generational trends report is something every industry practitioner should spend time getting to know (at least, practitioners that prefer to make money).

Below are the highlights – read them first, then dig into the full report here.

Characteristics of Home Buyers

  • 21% of homebuyers between the ages of 22 to 29 are unmarried.
  • 22% of homebuyers between the ages of 65 to 73 are single females.
  • 31% of homebuyers between the ages of 40-64 purchased a multigenerational home (will home adult siblings, adult children, parents, or grandparents).
  • 33% of homebuyers between the ages of 22 to 29 stated that they lived with parents/relatives/friends who paid and did not pay rent before their living arrangement.

Characteristics of Homes Purchases

  • The oldest and the youngest age groups (74 to 94, and 22 to 29) were most likely to purchase a new home for the amenities of new construction communities (though a small share of buyers aged 22 to 29 purchased new homes).
  • 25% of homes purchased by homebuyers within the ages of 22 to 29 were located in a small town.
  • 43% of homes purchased by homebuyers between the ages of 55 to 64 were located in a small-town or rural environment.
  • 64% of homebuyers between the ages of 22 to 29 stated the overall affordability of the home as a factor was influencing neighborhood choice.
  • 53% of homebuyers between the ages of 22 to 29 and 74 to 94 stated convenience to friends/family as a factor was influencing neighborhood choice.
  • 46% of homebuyers between the ages of 30 to 39 noted the quality of the school district as a factor influencing neighborhood choice.
  • 38% of homebuyers between the ages of 30 to 39 stated convenience to schools as a factor influencing neighborhood choice.
  • 29% of homebuyers between the ages of 65 to73 reported convenience to a health facility as a factor influencing neighborhood choice.
  • 36% of homebuyers between the ages of 74 to 94 stated convenience to a health facility as a factor was influencing neighborhood choice.
  • The median expected length of tenure in homes purchased between the ages of 40 to 73 is 20 years.

The Home Search Process

  • 63 % of homebuyers between the ages of 22 to 29 stated finding the right property as the most challenging step of the home buying process.
  • 60 % of homebuyers between the ages of 30 to 39 reported finding the right property as the most challenging step of the home buying process.

Home Buying and Real Estate Professionals

  • 92% of homebuyers between 22 to 29 and 30 to 39 bought a home through a real estate agent or broker.
  • 85% of homebuyers between 22 to 29 used a real estate agent to help understand the buying process.
  • 51% of homebuyers between 22 to 29 found a real estate agent through a referral from friends or family.
  • 45% of homebuyers between the ages of 30 to 39 found a real estate agent through a referral from friends or family.

Financing the Home Purchase

  • 27% of the homebuyers between 22 to 29 stated gift from a relative or a friend as the source of their down payment.
  • 6% of homebuyers between 22 to 29 stated loan from a relative or a friend as the source of their down payment.
  • 46% of homebuyers between 65 to 73 stated savings as the source of their down payment.
  • 56 % of homebuyers between 65 to 73 stated proceeds from the sale of the primary residence as the source of their down payment.
  • 39% of homebuyers between the ages of 74 to 94 stated savings as the source of their down payment.
  • 52% of homebuyers between 74 to 94 stated proceeds from the sale of the primary residence as the source of their down payment.
  • 30% of homebuyers between 22 to 29 stated saving for a downpayment was the most difficult task in the buying process.
  • Home purchases delayed at a median of 5 years between the ages of 40 to 54, due to difficulty saving.
  • 7% percent of homebuyers between 40 to 54 reported having their buyer application rejected by a mortgage lender.
  • 15% of the homebuyers between 50-54 stated they’d sold the distressed property.
  • 82% of homebuyers between the ages of 22 to 29 reported they view their home as a good financial investment.
  • 84% of homebuyers between the ages of 30 to 39 stated they view their home as a good financial investment.

Home Sellers and Their Experience

  • 28% of home sellers between 30 to 39 stated their home was too small as the primary reason for selling their previous home.
  • 21% of home sellers between 40 to 54 indicated their home was too small as the primary reason for selling their previous home.
  • 19% of home sellers between 55 to 64 stated the primary reason for selling their previous home was to move closer to friends and family.
  • 28% of home sellers between 65 to 73 stated the primary reason for selling their previous home was to move closer to friends and family.
  • 33% of home sellers between 74 to 94 stated the primary reason for selling their previous home was to move closer to friends and family.
  • 17% of home sellers between 74 to 94 stated home was too large as the primary reason for selling their previous home.
  • 11% of home sellers between the ages of 40 to 54 who lived in the home or rented their home to others while living elsewhere, stated they wanted to sell earlier but waited or stalled because the home was worth less than the mortgage.
  • The median tenure of home sellers between the ages of 55 to 64 in the previous home is 12 years.
  • The median tenure of home sellers between the ages of 65 to 73 in the previous home is 12 years.
  • The median tenure of home sellers between the ages of 74 to 94 in the previous home is 12 years.

Home Selling and Real Estate Professionals Methodology

  • 21% of homebuyers between the ages of 30 to 39 stated helping the seller find ways to fix up home to sell it for more as the most wanted service from real estate agents.
  • 20% of homebuyers between the ages of 40 to 54 stated helping the seller find ways to fix up home to sell it for more as the most wanted service from real estate agents.
  • 23% of homebuyers between the ages of 55 to 64 stated helping the seller market home to potential buyers is the most wanted service from real estate agents.

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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