Flashback to 2016—millennials were dominating the homebuying and selling market. Many baby boomers were just starting to think about retirement, and Gen X was starting to hit their homebuying and selling stride. Now, there’s a new generation in town; Gen Z has entered the market, and the millennial share of homeownership is decreasing, making way for Gen X to take the lead.
The more you understand the driving forces behind each generation’s preferences, the better you can help people achieve their buying and selling goals. Here’s everything you need to know about Gen Z, millennial, Gen X and baby boomer homebuyers and sellers, courtesy of the National Association of REALTORS® 2023 Home Buyers and Sellers Generational Trends Report, which covers nationwide homeownership statistics.
GEN Z
AGES: 13-26
BORN BETWEEN: 1997-2010
PERCENTAGE OF U.S. POPULATION: 20.8%
Currently, Gen Z makes up 4% of homebuyers nationwide, and 3% of home sellers, but this doesn’t mean they aren’t an important part of the market. A portion of this generation isn’t even 18 years old yet! Of those who recently purchased a home, about one third moved directly from their family home to their newly purchased home; keep in mind that these buyers are likely brand new to the transaction process.
When it comes to the home of their dreams, Gen Z homebuyers are purchasing the smallest homes at just under 1,500 square feet, and—at just over $50,000 —they’re purchasing them with the lowest median household income of any generation. While inventory shortages may provide challenges for Gen Z, they are the generation most likely to own a home that’s not a detached single-family property. This broadens the property options – which Chicago is well suited for! – and counterbalances inventory shortages.
For Gen Z, the biggest priority during their home search is finding something in a location convenient to friends and family. Additionally, while only 10% of homebuyers nationwide were unmarried couples, the highest percentage of single female homeowners is in Gen Z at 31%.
MILLENNIALS
AGES: 27-42
BORN BETWEEN: 1981-1996
PERCENTAGE OF U.S. POPULATION: 21.7%
Over the last few years, millennials have dominated the housing market.
However, the share of millennial homeowners has decreased from 37% in 2021 to 28%, which is the second-highest share of buyers in the market. Millennials still, however, lead the first-time homebuying market, with 70% of younger millennials (aged 24 to 32) and 46% of older millennials (aged 33-42) being first-time buyers.
Older millennials also have one of the highest shares of married homeowner couples at 66%, while younger millennials have the highest share of unmarried homeowners at 20%.
When looking for a home, convenience to their job is the most important thing for millennials. Those selling their homes are likely doing so because their current home is too small, their neighborhood has become less desirable or because of a job relocation. Despite all of these factors, Millennials are most likely to move the lowest median distance from the home they previously resided in at just 15 miles. Millennials are also the most likely to get help from friends and family for their home purchase in the form of a gift or loan.
GEN X
AGES: 43-58
BORN BETWEEN: 1965-1980
PERCENTAGE OF U.S. POPULATION: 19.6%
Of all the generations in the housing market, Gen X has the most diverse population of homebuyers. The whole generation makes up 24% of all recent homebuyers. This is likely due to their buying power, as they are the highest earning homebuyers with a median income of $114,300 per household.
While millennials have the most first-time homebuyers, Gen X follows closely behind at 21%. Even though there are plenty of first-time homebuyers in this generation, Gen Xer’s are also the most likely generation to own an additional property, whether it’s for
investments or a vacation home.
While proximity to family tends to be the main reason other generations choose the location of their home, Gen X is more likely than any other generation to purchase a home for their desire to be close to a job/school/transit or for job relocation.
BABY BOOMERS
AGES: 59-77
BORN BETWEEN: 1946-1964
PERCENTAGE OF U.S. POPULATION: 20.6%
Baby boomers make up the largest share of buyers and sellers in the housing market at 53% of sellers and 39% of buyers. Young boomers consist of 23% of recent buyers, while older boomers make up 16% of recent buyers. When baby boomers buy a home, they’re looking for longevity, as they expect to own their homes for 20 years—longer than any other generation.
When looking for a home, baby boomers’ primary desire to purchase is to be close to friends and family. They also aim to purchase smaller homes but are the generation most likely to buy newer homes; the average baby boomer home was built in 1996. In the name of downsizing, we’ve recently seen some baby boomers making their way from the suburbs back into the city to purchase condos and take advantage of the proximity to restaurants, entertainment and more.
SILENT GENERATION
AGES: 78-95
BORN BETWEEN: 1928-1945
PERCENTAGE OF U.S. POPULATION: 5.4%
The Silent Generation currently has one of the smallest shares of homebuyers at just 4%, and their homebuying needs are much different than those of any other generation. When looking for a home, these buyers tend to look for properties that are close to friends and family, or in senior-related housing. They are more likely to choose a home based on the proximity to healthcare services than any other generation. Silent Generation sellers are more likely to sell their home because it is too large, and they are purchasing condos at higher shares than any other age group.
Additional Quick Facts
- Buyers aged 57 and under were more likely to buy bigger homes.
- Buyers over 57 years old were more likely to downsize.
- Of homebuyers from July 2021 to July 2022:
- 61% were married couples.
- 17% were single females.
- 9% were single males.
- 10% were unmarried couples.
- About three quarters of homeowners finance their purchases, but this percentage decreases as the age of the buyer increases.
- The biggest delay to buying a home is caused by student loan debt.
- Real estate agents and brokers are still the top resource for homebuying and selling in all generations.
- About one third of all buyers have a child under the age of 18 living at home.
Gain Client Insights Through Education
While all this information is insightful, how can you ensure you’re prepared to help a wide variety of homeowners? Our affiliated school, the REALTORS® Real Estate School, has many skill-building, certification and designation courses that can help, such as:
The Resort & Second Home Property Specialist Certification
Get the knowledge and skill base you need to specialize in buying, selling, or managing second homes in a resort, recreational, and/or vacation destination and properties for investment, development, or retirement.
The Seniors Real Estate Specialist (SRES) Designation
Better meet the special needs of maturing Americans when selling, buying, relocating or refinancing residential or investment properties.
Find an upcoming course at ChicagoREALTOR.com/education.