When making an important decision like buying a new home, personal circumstances are often a driving force. Whether you are a first-time homebuyer, need more space for your growing family, downsizing to fit an empty nest, or looking for a retirement property, finding the right information, the right real estate agent, and the right properties that fit your needs are all important parts of that process. Based on recent studies by the National Association of REALTORS®on generational trends, we can identify the best resources to help you in any phase of your life.
Among all generations, the first step most buyers take when searching for a home is online. Younger generations tend to find the home they eventually purchase online, while older generations generally find the home they purchase through their real estate agent.
Across generations, home ownership still represents a significant step in achieving the American Dream. According to a study by LearnVest, an online financial resource, 77 percent of those surveyed believed that buying a home of their own was, “first and foremost in achieving the American Dream”.
How that dream manifests is different for those who have grown up in different eras.
Also known as Generation Y or the Echo Boomers because this generation almost equals the baby boomers in population. This age group is the second largest group of recent homebuyers, representing 28 percent according to the National Association of REALTORS. 79 percent of homebuyers in this age are purchasing their first home. According to the 2012 Trulia American Dream Study, 93 percent of renters in this generation plan on purchasing a home someday.
When considering a home purchase, Millennials (and some Generation X buyers) place a high value on convenience to work, affordability, and the quality of school district. This generation is the most likely to choose an urban center as the location of their first home. According to market research by Gfk Roper, this group is most interested in their home as a social hub, with a focus on entertainment and amenities.
When looking for a real estate agent, Millennials are most likely to looks to friends and family for a referral. They generally place a high value on an agent’s honesty and trustworthiness because they are often relying on their agent to walk them through the home purchase process for the first time.
As the largest group of recent homebuyers, the LearnVest findings suggest that 72 percent of Americans in this generation are already homeowners. They also represent the largest group of home sellers, with a substantial percentage of the group looking to upgrade their home to accommodate their growing families or increase investment. Experts in the real estate industry expect this group to lead in the recovered real estate market.
Generation X households are more likely to have a dual income, with both adult members in the household working. According to a study by GfK Roper, a market research company, this generation placed state-of-the-art kitchens at the top of their priorities, as well as large closets and amenities for organization, since many Gen Xers have children living in their homes. They are less concerned about formality in their home and have less interest in formal dining and living rooms.
Interestingly enough, the NAR study finds that as the age of the homebuyer increases, the age of the home being purchased declines. Baby boomers and older buyers are looking for newer construction, with less need for renovations or large maintenance issues. This generation ranks state-of-the-art kitchens, whirlpool baths, walk-in closets, and hobby spaces high on their list of must-haves, according to GfK Roper.
The boomer generation is also looking to the future for both themselves and their aging parents, “fourteen percent of homebuyers over the age of 48 are looking to purchase senior-related homes, for themselves or others” according to the NAR study. Boomer parents are becoming accustomed to (or preparing for) an empty nest, so this group may be downsizing or looking for a home that specifically fits their needs.
This generation of buyers places a bigger emphasis on finding a home closer to friends, family, and health facilities. While this generation uses the Internet to find their home in the early stages of a home search, they work more directly with a trusted real estate agent to find the home that specifically fits their needs. A home purchase for members of this generation will likely not be a first-time experience so they are less willing to compromise on the price, size, or condition of a home.
This generation is generally more satisfied with the homebuying and selling process because they have been through it before and know what to expect. According to the Trulia American Dream study, this group is also most likely to have realistic assumptions about the cost of a home and mortgage.