The majority of all buyers (79 percent) purchased a detached single-family home. Gen X buyers represented the largest share of single-family homebuyers (85 percent), and the Silent Generation was the most likely to purchase a townhouse or row house (10 percent). A combined 7 percent of millennial buyers bought an apartment, condo or duplex in a building with two or more units.
Among the biggest factors influencing neighborhood choice, millennials were most influenced by the quality of the neighborhood (75 percent) and convenience to jobs (74 percent). Convenience to schools was most desired by Gen X buyers and proximity to health facilities by the Silent Generation.
Millennials plan to stay in their home for 10 years, while the baby boom generation as a whole plans to stay for a median of 18 years.
Financing the Purchase
NAR’s study found that 88 percent of all buyers in the past year financed their purchase. Millennials (97 percent) and Gen X (96 percent) were more likely to finance than older boomers (72 percent) and the Silent Generation (61 percent). The median down payment ranged from 7 percent for millennial buyers to 20 percent for older boomers.
Younger buyers who financed their home purchase most often relied on savings for their down payment, whereas older buyers were more likely to use proceeds from the sale of a primary residence. Younger buyers also were more likely to receive a gift from a relative or friend, typically their parents, cited by 25 percent of millennials and 15 percent of Gen X.
Twelve percent of all recent buyers had delayed their home purchase due to outstanding debt. Among the 22 percent of millennials who took longer to save for a down payment, 54 percent cited student loan debt as the biggest obstacle—down slightly from 56 percent a year ago.
Younger buyers were more likely to finance their purchase with a low down payment Federal Housing Administration-backed mortgage, whereas older buyers were more likely to obtain a mortgage through the Veterans Affairs loan program.
Characteristics of Sellers
Gen X homeowners represented the largest share of sellers in the past year (27 percent), followed by older boomers (23 percent) and younger boomers (20 percent). The older the seller, the longer he or she was in the home. Millennials had been in their previous home for a median of five years, while older boomers and the Silent Generation stayed for 13 years.
Younger sellers were more likely to need a larger home or move for job relocation. In comparison, older buyers wanted to be closer to family or friends, says their home was too large, or were moving due to retirement.
The survey additionally found that Gen X sellers were the most likely to have wanted to sell earlier but were stalled because their home had been worth less than their mortgage (23 percent compared to 16 percent for all sellers).
Sellers moved a median distance of 20 miles, with boomers and the Silent Generation moving further distances and downsizing to a smaller-sized home.
A combined 60 percent of responding sellers found a real estate agent through a referral by a friend, relative or neighbor, or used their agent from a previous transaction. Eighty-three percent are likely to use the agent again or recommend to others.
While all sellers wanted help in marketing their home to potential buyers, younger sellers were more likely to want their agent to help with pricing the home competitively or selling within a specific timeframe.
NAR mailed a 127-question survey in July 2014 using a random sample weighted to be representative of sales on a geographic basis. A total of 6,572 responses were received from primary residence buyers. After accounting for undeliverable questionnaires, the survey had an adjusted response rate of 9.4 percent. The recent homebuyers had to have purchased a home between July of 2013 and June of 2014. Because of rounding and omissions for space, percentage distributions for some findings may not add up to 100 percent.
Highlights of the 2015 NAR Home Buyer and Seller Generational Trends study can be found here. Infographics with breakdowns of the survey data are available at www.realtor.org/infographics.
For more information, visit www.realtor.org.
