In the words of one of one of rock’s greatest hits, we didn’t mean to cause a big sensation…but NAR recently released its 2017 Home Buyer and Seller Generational Trends study. This is fascinating research, not only because generation trends impact home buying activity, but because there’s been plenty of angst about the Millennial Generation and whether they will enter the home market at the same rate as previous generations.
Those fears were pretty well abated by the survey. Millennial buyers, at 85 percent, were the most likely generation to view their home purchase as a good financial investment. As parents of young children, they’re prioritizing affordability and looking to buy homes in the suburbs.
There was also good news about Generation X. This was the generation who bought their first home, started a family and were mid-career when the Great Recession wreaked havoc on their finances. Many of them bought at the peak of the market and didn’t necessarily develop a great deal of equity in their home. On top of that, they carry the most student loan debt—an average of $30,000.
Finally, the stronger job market and 41 percent cumulative rise in home prices since 2011 have bolstered home equities. That, plus a growing job market, has created enough equity that more homeowners can now trade up to a larger home.
My own generation, believe it or not, is also held back by student debt. The report showed that student loans delayed saving for a down payment or a home purchase for people as old as 62 to 70. Much of this is debt taken on to support family members, but many older individuals have also decided to go back to school themselves.
I was thrilled to see that the survey also said that, while they go online to shop, millennial and Gen X buyers and sellers overwhelmingly use a real estate agent to complete their transaction.
In fact, 90 percent of respondents said they worked with a real estate agent to buy or sell a home. This resulted in the lowest number of for-sale-by-owner transactions ever at 8 percent, which means there’s no danger that the Realtor®-consumer relationship will fade away any time soon.
To the contrary, this vital generational information can help us be more successful in our businesses as we work to meet the needs of consumers of all different ages. It’s all groovy, baby!