Millennials are once again driving the home purchase market: NAR

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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Millennials are looking forward to buying a home, but feel overwhelmed by the process

First-timers admit they seek help from mom and dad

Millennials are buying homes. This much is known. But, despite the much-discussed generation making their entrance into the housing market, many still are still very uneasy about the process.

To try to get into the minds of millennials, TD Bank surveyed more than 850 millennials (which it categorizes as age 23-38) who are planning to buy their first home in 2020.

According to TD Bank’s First-Time Homebuyer Pulse, 68% said they think now is the right time to buy a home and 52% are actively searching home listings online.

But, 75% of first-time Millennial homebuyers admit they’re overwhelmed by the process of buying a home.

As for what’s weighing on millennials’ minds, the answers vary.

Image courtesy of TD Bank. Click to enlarge.

Just over half of those surveyed said they are worried about their job stability when it comes to looking for somewhere to live.

Meanwhile, 35% said they are thinking about their relationship with their significant other, 57% said they are worried about the state of the economy, and 47% said they are keeping in mind potential policy changes in the 2020 election – all of which play a role in their homebuying anxiety.

Unsurprisingly, student loan debt is playing a role too. Just over 40% of Americans who graduated in the last 20 years said they have delayed purchasing a home because of their student loan debt, the report said.

Even though a big chunk of Millennials say they are planning to purchase a home in the next 12 months, only 52% said they have started saving for a down payment, and 53% have reviewed their credit reports.

Meanwhile, only 42% said they have established a budget for their home purchase and only 30% have spoken with a mortgage lender.

“It continues to amaze me how many buyers begin their home search without first speaking with a mortgage lender,” said Rick Bechtel, head of U.S. residential lending at TD Bank. “A knowledgeable loan officer will work hand-in-hand with a buyer to help them understand mortgage and homeownership costs and establish a realistic budget. To put the cart before the horse is to pursue a significant life decision with possibly incomplete or inaccurate information.”

A decent amount said they feel prepared to buy, but it’s that same amount that said steep home prices are keeping them from purchasing a home in the neighborhood they desire, 22% both cases.

Of those respondents, 36% said they thought homes were overpriced. On the other end, 17% of buyers said they have yet to buy a home because they enjoy renting in their current neighborhood, but can’t afford to buy there.

“The millennial cohort of homebuyers is unlike any other in history,” said Bechtel. “They grew up during the explosion of personal technology, the fall of the housing market and the renaissance of the rental market. And as our survey found, their expectations of homeownership are shaped by all of it.”

Although Millennials were considerably young during the housing crisis in 2008, 67% said they are familiar with the housing crisis, while 55% said their family or a family they knew lost their home.

Those who were influenced by the housing crisis said it made them nervous to buy a home (47%), and a whopping 70% said they view the housing market as fragile.

And in an offshoot of that, 85% of buyers who said their families lost their home during the 2008 housing crisis said they will receive financial help from their parents when they go to buy their first home.

The most common way parents are contributing to the child’s home purchase is in the form of their child’s down payment (33%), followed by closing costs (20%), monthly mortgage payments (17%) or by co-signing the loan (9%).

All in all, mom and dad are still the role models for many of these Millennials. Case in point, 37% say they regularly ask their parents for advice about homebuying.

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Living in Hipsturbia: Cool Kids are Moving to the Suburbs

As millennials become parents they’re trading in their urban dwellings for a house in the ‘burbs.

Migrating out of downtowns isn’t new—kids and suburbs go together—but this generation isn’t ready to give up city life just yet. They’re looking for affordability as well as urban staples like dining, shopping, entertainment and jobs, all within a walkable distance.

The movement is being called “hipsturbia,” and it’s one of the major themes identified in the Emerging Trends in Real Estate 2020, a report recently released by Urban Land Institute and PwC.

The live/work/play formula is what developers used to revive downtowns two decades ago, and they’re plugging it into the suburbs with good success, says Byron Carlock, PwC Real Estate Leader.

“The trend started in Brooklyn and has spread to secondary cities,” he says. “Fun and cool places can be created. It’s where real estate meets people, interests and amenities.”

“Cool” suburban communities have active centers of town. They’re often near large anchor communities, like New York City, San Francisco and Chicago. Popular hipsturbia destinations include Hoboken, Maplewood, and Summit, New Jersey; Yonkers and New Rochelle, New York; Evanston, Illinois; and Santa Clara, California.

“These cities have a music scene, coffee shops, art scene and real estate with grit, affordability and creativity,” says Carlock.

In addition to amenities, hipsturbia single-family homes and multi-family rentals enable sharing.

“We’re seeing millennials and Gen Zers deciding to do life together,” says Carlock. “We’re seeing home sharing, ride sharing and cost sharing. The locations where they do it depend on their desired quality of life as well as access to jobs. A lot of growth is happening in cities around college towns. Students decide to stay there after they graduate”

Real estate developers are running with this trend, undergoing big projects. For example, a 240-acre development in Santa Clara includes offices, hotels, serviced apartments, and residences, bound together by an open-space plan for active and passive recreation, according to the report. It’s proximity to Stanford University contributes to its hipsturbia environment.

One of the Midwest’s oldest suburbs, Evanston is seeing a hipsturbia revival. Located near Northwestern University, residents enjoy rooftop bars, downtown shopping and access to and from the Chicago Loop via the Chicago Transit Authority’s purple line.

And in the Southwest, the hipsturbia formula is happening in Tempe, Arizona. Located near Arizona State University, you’ll find coffee shops, restaurants, breweries pubs, retail and entertainment—24/7.

As more suburbs attract hip residents, their success will fuel the formula for other cities and developers to take note. The live/work/play formula that revived inner cities a quarter century ago can work in the suburbs as long as they have the right elements, says Carlock.

“We’re seeing housing of all types,” he says. “Two story, multi-story and high rise urban living that is mixed use. These are live, work, walk neighborhoods. Developers need for the delivery product to be more relevant to current user. There are new opportunities to respond to the increase in demand, and the demand is asking for a different product.”

What do you think? Are there suburbs in the Greater Denver Metro Area that feel like hipsturbia to you?!

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Denver’s Housing Market Isn’t Crashing - It’s Changing.

Real Estate, Stocks or Cryptocurrency - What is most popular among investors now?

Stocks have long been the most glamorous of the major asset classes.

Many a Hollywood film has centered around making fast money in the stock market, and becoming a Wall Street big shot.

But despite their great long-term returns—they’ve averaged about 10 percent annually for decades—stocks are no longer Americans’ favorite long-term investment. What is? According to a nationwide Bankrate survey, it’s real estate.

Years after a housing crash that left the economy hurting, many Americans still see real estate as their top pick. Some 31 percent of survey respondents named real estate as their favored investment for money that they wouldn’t need for 10 years or more. It’s the best showing for real estate in the seven years that Bankrate has conducted the survey.

In 2018, stocks were the most popular investment. But this year they ran a distant second, with 20 percent of respondents naming stocks their top pick for holding periods of more than a decade.

Cash investments, such as savings accounts and CDs, finished third at 19 percent, while gold and other precious metals earned 11 percent. Americans picked bonds as their top long-term investment 7 percent of the time, while bitcoin and other cryptocurrencies were favored by 4 percent. Meanwhile, 5 percent of respondents said that none of these options were the best way to invest.

Millennials Are Most Drawn to Real Estate Investing
While some commentators have bemoaned the fact that millennials seem unwilling to buy housing, it’s not for lack of desire. Millennials in total scored the highest (36 percent) among all age groups in their preference for real estate as a long-term investment.

While millennials might be the most drawn to property, real estate still remained the most popular investment among all generations, from millennials to Generation X (31 percent), as well as baby boomers (30 percent) and the Silent Generation (23 percent).

“Millennials are higher on real estate than any other age group, have cooled a bit on cash, and still aren’t keen on the stock market when investing for more than 10 years,” says Greg McBride, CFA, Bankrate chief financial analyst.

Strikingly, the preference for real estate is virtually identical in all four income categories surveyed by Bankrate. Between 32-34 percent of the time it was the top investment choice for those who reported earning more than $75,000 per year; between $50,000 and $75,000; between $30,000 and $50,000; as well as less than $30,000.

Home—or least, real estate—is where the heart is for Americans.

Stocks More Popular Among Higher Earners
While real estate outdistanced stocks in each age and income demographic, stocks were more popular with higher earners compared to those with lower incomes. In fact, stocks were two and almost three times as popular with the highest income groups in the Bankrate survey.

For the two groups with incomes of at least $50,000, stocks were their top pick 28 percent and 29 percent of the time, just behind real estate. For the two groups earning less than $50,000 annually, stocks were their top pick only 15 percent and 11 percent of the time. In fact, the higher a respondent’s earnings, the more likely the choice of their favored investment was stocks.

Meanwhile, lower-income households showed a higher preference for cash investments such as savings accounts and CDs (22 percent), as well as for gold and other precious metals (12 to 17 percent).

Cryptocurrency Most Popular Among Younger Investors
One notable result, though perhaps not surprising, is the extent to which younger generations prefer bitcoin and other cryptocurrencies.

Millennials picked cryptocurrencies as their top long-term investment about 9 percent of the time—about triple the rate of Generation X. Earlier generations had negligible numbers of respondents selecting virtual currency as their top choice.

While many investors have written off cryptocurrencies, one of the world’s largest companies is setting up a project that may disrupt some more traditional payment networks. Social media giant Facebook is in the process of creating a virtual currency called Libra that may potentially be cheaper than traditional payment services.

Declining Interest Rates May Not Affect Investing Decisions
At press time, the Federal Reserve had hinted that it may be open to cutting interest rates, and investors had been nearly unanimous in expecting a rate cut in recent weeks. With that as a backdrop, the survey also questioned Americans about how the expected decrease in U.S. interest rates would play into their investment decisions.

The surprising result is that declining rates would appear to have little effect at all. Declining rates are not likely to move them to invest in the stock market, borrow money or put money into savings accounts or CDs, say respondents.

“A Fed interest rate cut is unlikely to influence how consumers manage their finances,” says McBride. “Only a minority of Americans say they would save more, invest more or borrow more as a result.”

For example, just 40 percent of respondents said they would be more likely to move money into cash investments such as savings accounts and CDs in response to declining rates. Only 26 percent said they would be more likely to borrow more money in response to falling rates. Meanwhile, just 33 percent of respondents said they were likely to invest in the stock market as rates fell.

But the responses varied by income level. For example, households earning less than $50,000 were more likely (37 to 49 percent) than high-income households (31 to 33 percent) to move money into bank products as rates fell. The lower the income, the more likely the respondent was to move assets into the bank.

What Should Investors Do to Meet Their Goals?
While a person should choose the investment that works best for their own individual situation, there are smart ways of accomplishing your goals regardless of what you choose: stocks, bank accounts, bonds or something else entirely.

If you’re moving your assets to a bank, then it makes sense to find a bank that offers higher yields. An online bank can offer many of the benefits of a brick-and-mortar rival, while still paying much higher interest rates.

Similarly, if you’re looking to move into stocks, you should consider a broker that meets your needs, not necessarily the cheapest or the flashiest. For example, many brokers offer research and education, including research reports, that help when making investment decisions.

©2019 Bankrate.com

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Here are the Cities Millennials are Actually Moving To

Millennials are on the move - in search of outdoor accessibility, a modern restaurant scene, low housing prices, and more…

…according to a new study published by insurance agency Haven Life, and they’re heading to certain cities to find them. 

Using data from the U.S. Census Bureau, the report ranked metropolitan areas according to the percentage change in the population of millennials from 2012 to 2017. The key finding? Millennials have been flocking to the Pacific Northwest. (They already account for nearly one-fifth of the population in the Portland-Seattle region!) Here are the five metro areas at the top of the list: 

1. Portland, Oregon (tied with Vancouver, Washington, and Hillsboro, Oregon)

2. Seattle (tied with Tacoma and Bellevue, Washington)

3. Denver (tied with Aurora and Lakewood, Colorado)

4. San Francisco (tied with Oakland and Hayward, California)

5. Austin (tied with Round Rock, Texas)

The report hinted that the surge in these areas is likely a response to rising housing costs in places like Chicago and New York (neither of which graced the top 20).

We happen to favor a certain city on this list…and I bet you could guess which one it is. Check out the links below for some of our best Denver info and inspo.

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