The share of Generation Z home buyers rises to 4%
Home buyers aged 35 and older now make up 39% of the market – the largest share of any generation. As of now, Generation Z makes up 4% of homebuyers, with 30% moving from a family member’s home directly into their own. All generations are moving farther distances when relocating, but younger boomers (ages 58-67) move the greatest distance, at a median distance of 90 miles.
Millennials have been overtaken by baby boomers as the largest generation of home buyers, according to a recent National Association of Realtors (NAR) study.
According to the 2023 Home Buyers and Sellers Generational Trends report, which examines the differences and similarities between recent home buyers and sellers across generations1, there will be 39% more younger boomer (58 to 67 years old) and older boomer (68 to 76 years old) buyers by 2022, up from 29% the previous year. Millennials aged 24 to 32 and 33 to 42 have been the top buyers since 2014, but their combined share fell from 43% in 2021 to 28% last year.
“Baby boomers have the upper hand in the homebuying market,” said Dr. Jessica Lautz, NAR deputy chief economist and vice president of research. “The majority of them are repeat buyers who have housing equity to propel them into their dream home – be it a place to enjoy retirement or a home near friends and family. They are living healthier and longer and making housing trades later in life.”
First-time buyers accounted for 26% of all buyers, the lowest level since NAR began tracking the data and a decrease from 34% last year. 70% of younger millennials and 46% of older millennials were first-time buyers. Compared to these groups, only 21% of Generation Xers (43 to 57 years old) and 9% of younger boomers had purchased a home for the first time.
Home buyers from Generation Z – ages 18 to 23 – now make up 4% of buyers, a slight increase from 2% in 2021. Thirty percent of Gen Z buyers moved directly from a family member’s home into their own. This cohort of buyers was most concerned with finding a location that was convenient to family and friends.
“As the youngest generation of home buyers and sellers, it’s encouraging to see Gen Z entering the market,” Lautz said. “Their desire for homeownership is strong, and many are relying on family support systems to help make their first real estate purchase.”
A total of 24% of buyers were from Generation X. A median household income of 114,300 was the highest of any generation, followed by 102,900 for older millennials.
Additionally, baby boomers remain the largest home seller generation, jumping from 42% in 2021 to 52% in 2022. Across all generations, sellers typically stayed in their homes for 10 years before selling. Younger millennials stayed in their homes for an average of four years, while older boomers sold their homes after 16 years.
The most common reason for selling was to be closer to friends and family. Additionally, older generations were more likely to sell because they retired, while younger generations cited the desire for a larger home and a job relocation as top reasons.
Moving farther distances is becoming more common. The median distance buyers moved when relocating was 50 miles, the highest ever recorded and significantly higher than 15 miles last year. Generation Y moved shorter distances, with younger and older millennials typically moving 15 miles apart. The younger boomers moved the farthest (90 miles), followed by the older boomers (60 miles) and the silent generation (50 miles).
It is expected that buyers will remain in their homes for 15 years, an increase from 12 years in 2021. Millennials are expected to live for only 10 years, compared to younger and older boomers for 20 years. According to Generation Z, they expect to stay in their newly purchased home for 19 years.
A real estate agent assisted 86 percent of buyers in buying their homes. It was highest among younger boomers (90%) and Generation X (88%). All generations agreed that the top reasons to use an agent were to find the right home to buy (49%), negotiate the terms of the sale (13%), and negotiate the price (11%). The majority of millennials (14%) and older (12%) want their agent to help with paperwork.
In a survey of all home buyers, 88 percent reported that home purchases are good investments. A home is considered to be a better or about as good a financial investment as stocks by 74% of younger millennials and 77% of older millennials.
Across all generations, 76 percent of buyers said they would use their agent again or recommend them to others.
“Owning a home is more than just a financial investment. It’s a symbol of stability, independence and community that helps people build their lives and achieve their dreams,” said NAR President Kenny Parcell, a Realtor® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “Whether you’re a first-time home buyer or an experienced investor, Realtors® have the expertise and knowledge needed to provide valuable advice and help you make informed decisions about your purchase.”