Who is buying homes these days? For the sixth consecutive year, according to the National Association of REALTORS® (NAR) latest 2019 Homebuyer and Seller Generational Trends report, Millennials (those born between 1980-1998) are the largest generational group (32%) buying houses. And among this largest home buying demographic, 20% of younger Millennials (those born between 1990–1998) are unmarried.
Yes, married couples of all ages remain the majority of home buyers but single individuals, unmarried couples and women are making their respective marks as buying consumers on the industry as a whole. Also garnering home buying attention are consumers wanting to live in multi-generational homes to accommodate needs of student loan debt-ridden adult children, aging parents and young children.
According to a report by NBC News, single women homeowners are far outpacing single men homeowners by a ratio of 2:1. “When we look at the data, there are a couple of corresponding elements that really play into what motivates women to become homeowners…independence being one, empowerment as another,” said Kathy Cummings, senior vice president for Homeownership Solutions and Affordable Housing Programs with the Bank of America.
Higher educational attainment has helped increase Millennial women’s financial independence compared to previous generations of women, according to Forbes. And for many older women, homeownership often comes after the beginning of a new life phase, such as a divorce or a death of a spouse. Jane Fairweather, a real estate agent in Bethesda MD, told CNBC, “They want stability. They want to have control over their monthly expenses. They want to be where their kids and/or friends are.”
NAR’s most recent Buyer and Seller Generational Trends report also dived into the increasing trend in multigenerational housing. Driving that trend is affordability. “The high cost of rent and lack of affordable housing inventory,” said Lawrence Yun, chief economist with NAR, “is sending adult children back to their parents’ homes either out of necessity or an attempt to save money…(this trend) allows younger potential buyers an opportunity to gain their financial footing and transition into homeownership.”
In conjunction with the Pew Research Center, NAR pointed to older MIllennials needing to care for older parents as well as Millennials needing parents to care for their younger children. Both ends of the age spectrum do better when grandparents help children succeed in school and when grandchildren help grandparents decrease the likelihood of dementia and depression, according to Alzheimers.net.
Based upon these changing demographics and changing needs, the real estate industry may have to adapt its policies to support the purchasing preferences of this changing buyer pool. Brokers and agent may need to help women find more financing options for down payments and closing costs due to the omnipresent wage gap between women and men. Brokers and agents may need to advocate for student loan reform to mitigate the disproportional impact of educational debt on Millennial buyers. And, brokers and agents may need to assist multi-generational families if/when there are multiple unmarried adult buyers.